The U.S. Department of Energy announced that it has terminated $3.7 billion in grants awarded to clean energy projects under the Biden administration through the Office of Clean Energy Demonstrations (OCED), claiming that the prior administration “failed to conduct a thorough financial review,” and that the projects were not economically viable.
In all, the DOE said that 24 awards were cancelled. Of those, the department added that two thirds were signed between the 2024 election day and the Trump inauguration. Most of the projects focused on carbon capture and sequestration (CCS) and decarbonization initiatives.
The cancelled awards included $500 million for a carbon capture project at a Heidelberg Materials cement production plant, $330 million for a clean hydrogen project by Exxon Mobil, and $375 million for a plastic recycling project by Eastman Chemical.
The announcement forms part in a series of moves by the Trump administration to reverse the Biden administration’s efforts to scale funding for clean energy and decarbonization projects. The Office of Clean Energy Demonstrations was launched in 2021 by the DOE, aimed at supporting clean energy technology demonstration projects in areas including clean hydrogen, carbon capture, small modular reactors, and grid-scale energy storage, among others. The launch of the OCED followed the passage of the Bipartisan Infrastructure Law, which earmarked over $20 billion in funding for clean energy demonstrations and research hubs, supporting the acceleration of the Biden administration’s goals to achieve 100% carbon-free electricity by 2035 and a net-zero-carbon economy by 2050.
In a statement announcing the cancelations, however, U.S. Secretary of Energy Chris Wright said that the “DOE found that these projects failed to advance the energy needs of the American people, were not economically viable and would not generate a positive return on investment of taxpayer dollars.”
Wright added:
“While the previous administration failed to conduct a thorough financial review before signing away billions of taxpayer dollars, the Trump administration is doing our due diligence to ensure we are utilizing taxpayer dollars to strengthen our national security, bolster affordable, reliable energy sources and advance projects that generate the highest possible return on investment. Today, we are acting in the best interest of the American people by cancelling these 24 awards.”
Energy transition focused groups criticized the Trump administration’s announcement, with many noting that it would put the U.S. behind in the development of key decarbonization technologies.
Conrad Schneider, U.S. Senior Director of Clean Air Task Force (CATF), said:
“Today’s action is bad for U.S. competitiveness in the global market and also directly contradictory to the administration’s stated goals of supporting energy production and environmental innovation. Canceling cutting-edge technology demonstrations, including support for carbon capture and storage projects, undercuts U.S. competitiveness at a time when there is a growing global market for cleaner industrial products and technologies.”
