Cliffs’ original project would’ve replaced coal with natural gas — and eventually hydrogen — eliminating roughly 1 million tons of planet-warming emissions. But after President Donald Trump took office in 2025, the Ohio-based steelmaker recommitted itself to using “beautiful coal” at the Middletown steel mill.
Under its current plan, Cliffs says it will refurbish and optimize the 73-year-old blast furnace so that it can run for potentially another two decades. The manufacturer will also install a cogeneration plant that uses waste gases from the blast furnace to generate steam and electricity for the steel mill’s operations. Cliffs said it will invest $500 million of its own money to match DOE’s grant.
Cliffs first outlined the new direction in a February air-permit application submitted to Ohio’s environmental regulator. It wasn’t clear then whether this work would be funded by the DOE, given the nature of the grant program.
However, in July, Goncalves said during an earnings call that the company aimed to redirect the $500 million grant to align with the Trump administration’s priorities. Friday’s announcement cements those plans, with the DOE having “established a framework for Cliffs to finalize negotiations and implementation plans” for the Middletown project, Cliffs said.
In a news release, the DOE said the company “determined that the business case for the original project scope no longer made sense given customers’ unwillingness to pay a ‘green premium’ for steel. Working with the DOE, Cleveland-Cliffs identified a viable alternative that will upgrade and improve the efficiency of its existing coal-fired blast furnace” while also capturing waste gas.
A former DOE official noted that Congress legally mandated that the grant funding be used to, in the words of the Inflation Reduction Act, enable “advanced industrial technology” — defined as something “designed to accelerate greenhouse gas emission reduction progress to net-zero at an eligible facility.”
The Middletown project’s revised scope will move the steel mill away from achieving net-zero emissions, not toward it, the former official said.
As Cliffs sees it, the steelmaker is “going above and beyond a standard blast furnace reline, to include the most advanced technology available,” Goncalves said in Friday’s statement, referring to the cogeneration plant and other planned energy-efficiency improvements.
“Cleveland-Cliffs is making a decisive investment in the future of American steelmaking and manufacturing,” he said.
