Trump Administration Halts Billions in Chemical Decarbonization Funding

The US Department of Energy (DOE) is pulling the plug on billions of dollars allocated to projects aimed at curbing industrial carbon emissions. This decision coincides with proposed budget slashing for key decarbonization programs, raising concerns among clean technology advocates.

These sweeping changes, initiated by the Trump administration, threaten to decelerate the adoption of pollution-reducing technologies and potentially diminish the United States’ standing as a leader in clean technology innovation.

Projects Facing the Ax

A diverse array of initiatives are affected by this funding cancellation, including:

• Eastman Chemical: A plastics recycling plant.
• ExxonMobil: A transition to hydrogen fuel at a Texas refinery.
• Orsted: A low-carbon methanol facility.
• LanzaTech and Technip Energies: A collaboration focused on low-carbon ethylene production.
• Sublime Systems: A low-carbon cement plant.
• Via Separations and Nippon Dynawave Packaging: A partnership aimed at cutting emissions in paper production.
• Various carbon capture technology projects.

The DOE justifies these cancellations by citing economic non-viability and a lack of sufficient return on investment for the projects.

Budgetary Overhaul

These awards were initially granted by the DOE’s Office of Clean Energy Demonstrations (OCED) during the Biden administration. The current administration’s budget request proposes eliminating funding for the OCED altogether, along with significant cuts to other decarbonization-focused offices.

The proposed changes include:

• Office of Technology Commercialization: Complete defunding, effectively halting research into commercializing clean technologies.
• Office of Energy Efficiency and Renewable Energy: A potential 74% budget cut, impacting the network of national laboratories.
• Advanced Research Projects Agency–Energy (ARPA-E): A possible 57% budget reduction, hindering the commercialization of clean technologies.

Some Projects Spared

Not all chemical projects are affected. Dow’s plan to produce carbonate solvents from captured carbon and BASF’s project to generate syngas from chemical manufacturing by-products have been spared.

Industry Reaction

The cancellations have surprised some companies. Eastman CEO Mark Costa expressed confidence in their project’s alignment with the Trump administration’s focus on US manufacturing. Sublime Systems also voiced surprise, emphasizing their project’s alignment with boosting US manufacturing.

The Clean Air Task Force and the Carbon Capture Coalition have both criticized the DOE award cancellations, arguing that they hinder US competitiveness in clean technology industries and contradict the administration’s goal of increasing energy production.

Potential Impact

Derrick Flakoll, a policy analyst at BloombergNEF, suggests the cancellations will create a significant void in industrial decarbonization efforts. While the financial value of these awards might be smaller compared to tax credits from the Inflation Reduction Act, their impact on driving significant changes in the sector could have been substantial.

“In some cases, they might have had an outsized impact,” he concludes.