Trump administration cancels billions for chemical decarbonization

The US Department of Energy (DOE) is canceling billions of dollars in awards intended to reduce industrial carbon emissions, and it is proposing major cuts to programs focused on decarbonization. Clean technology proponents warn that the moves may slow adoption of methods that reduce pollution and could undercut the country’s status as a clean technology leader.

The canceled awards include an Eastman Chemical plastics recycling plant, ExxonMobil’s switch to hydrogen fuel at a Texas refinery, an Orsted low-carbon methanol facility, a project by LanzaTech and Technip Energies for low-carbon ethylene, Sublime Systems’ low-carbon cement plant, a collaboration between Via Separations and Nippon Dynawave Packaging to cut emissions in paper production, and several plans to use carbon capture technologies. The DOE says the projects aren’t economically viable and wouldn’t provide a good return on investment.

The awards had been issued by the DOE’s Office of Clean Energy Demonstrations (OCED) during the Joe Biden administration. In a budget request for the DOE released May 30, the Donald J. Trump administration proposes eliminating funding for OCED and making major cuts to other offices focused on decarbonization.

Notably, the request proposes zeroing out the budget for the Office of Technology Commercialization, which researches ways to commercialize clean technologies. The Office of Energy Efficiency and Renewable Energy, responsible for managing the network of national laboratories, could face a 74% cut. The Advanced Research Projects Agency–Energy, which supports commercialization of clean technologies, could see a 57% budget reduction.

Several chemical projects funded by OCED have been spared, including Dow’s plan to make carbonate solvents and other ethylene derivatives from captured carbon on the US Gulf Coast and a BASF endeavor that seeks to produce syngas from the by-products of a Texas chemical manufacturing site.

Leading up to Trump’s second term, many clean technology analysts predicted that his administration’s focus on boosting US manufacturing might provide some protection for decarbonization projects funded during the Biden administration.

“A fair number of analysts, including me, may have overestimated the appeal of industrial jobs and projects that are not on the ground yet,” says Derrick Flakoll, a North American policy analyst at the research firm BloombergNEF.

The cancellations appear to have caught some companies by surprise. “We think that our project actually holds up well in the way President Trump thinks about US manufacturing,” Eastman CEO Mark Costa told investors on an April 25 conference call. “There’s a lot of staff change going on in the DOE right now . . . but we’re not getting any indication that the project is at risk.”

Kristin Parker, an Eastman spokesperson reiterated on May 13 that the company sees its plastics recycling project as aligned with Trump administration priorities. Eastman said staffing cuts slowed down communication with the DOE, but the company had received $11 million in DOE payments during the first quarter of 2025 and had expected the project to continue unimpeded.

Sublime finished negotiations for the DOE award in December and on May 22 announced that Microsoft had agreed to buy 600,000 metric tons of low-carbon cement from its planned facility.

In a statement, Sublime says that it is surprised about the cancellation because its cement project lines up with the Trump administration’s goal of boosting US manufacturing. But Sublime says it had prepared for the possibility of cancellation and is evaluating several alternatives to continue scaling up its technology.

In January, Brimstone, another low-carbon cement company, received $8.7 million from OCED to start working on the first phase of a project that would produce both cement and alumina. “Given our project's strong alignment with President Trump's priority to increase US production of critical minerals, we believe this was a misunderstanding,” Liza Darwin, who leads Brimstone’s communications, says about the cancellation.

ExxonMobil, Nippon Dynawave Packaging, and Technip Energies also had already received the first tranche of funding for their awards in December 2024.

The Clean Air Task Force, a nonprofit that advocates policies that reduce greenhouse gas emissions, criticized the DOE award cancellations as a step backward for US competitiveness in clean technology industries and argued that the cuts are in opposition to the Trump administration’s goal of increasing energy production. The Carbon Capture Coalition, an industry group representing carbon capture companies, expressed disappointment about the canceled awards, arguing that carbon management projects are a good investment that generate jobs and economic growth.

Flakoll says the cancellations will leave a big hole in industrial decarbonization efforts. Compared with the value of tax credits in the Inflation Reduction Act of 2022 for producing clean technology materials, these awards are comparatively small. But he says OCED’s funding for such demonstration projects can lead to large changes.

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