Cleveland-Cliffs recently scrapped a plan to convert a steel mill from fossil fuels to hydrogen, which would have dramatically reduced its carbon emissions.
The Cleveland-based steelmaker, one of Northwest Indiana's largest employers, will not use a $500 million U.S. Department of Energy grant to modernize the Middletown Works steel mill near Cincinnati to replace the coal variant coke with cleaner-burning hydrogen. It would have invested $1.3 billion itself in the project, which was estimated to safeguard 2,500 jobs, create 170 more permanent jobs and result in 1,200 temporary construction jobs.
The steel mill was founded as Armco Steel in 1900 and was most recently owned by AK Steel before Cleveland-Cliffs took it over.
Cleveland-Cliffs CEO Lourenco Goncalves said during a recent conference call with investors that the steelmaker scrapped the project because of doubts about the availability of hydrogen.
"As far as Middletown, the original project that we had there was basically replacing the blast furnace with two electric arc furnaces and the direct reduction line. And that line would be supported by hydrogen instead of natural gas," he said. "That was the end game of that project in Middletown. The very first thing it’s clear by now that we will not have availability of hydrogen. So there is no point in pursuing something that we know for sure that’s not going to happen."
Last year, the U.S. Department of Energy pledged $7 billion to establish hydrogen hubs around the country, including near the BP Whiting Refinery. But the Trump administration has shifted away from projects that aim to reduce carbon emissions.
With federal funding facing an uncertain future, BP already indefinitely delayed its plans to develop a hydrogen plant in Whiting to supply Region steel mills and other hard-to-decarbonize industries in Indiana, Illinois, Michigan and the Midwest. Cleveland-Cliffs even underwent a hydrogen trial at Indiana Harbor Works in East Chicago to study the viability of a switch.
Cleveland-Cliffs is now looking at investing in fossil fuels at Middletown Works.
"It’s not like that project was canceled by the Department of Energy because it was not. We informed the Department of Energy that we would not be pursuing that project," Goncalves said. "We had a very good conversation with the current Department of Energy team on revamping that project in a way that we preserve and enhance Middletown using beautiful coal, beautiful coke, beautiful natural gas, our American iron ore from Minnesota, keeping Middletown Works as our flagship facility supplying automotive steels and making our blast furnace operate fully under AI. So that’s what we have in scope right now."
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