Julia Owoc
Ohio Steel Giant Cleveland-Cliffs Abandons Big Hydrogen Plan, Turns Back to Coal Amid Political Shift
Steel leader Cleveland-Cliffs scraps a $500M hydrogen project in Ohio, citing costs and political changes, as coal gains fresh momentum.
- $1.6B: Total investment needed for hydrogen steel plant
- $500M: DOE grant Cleveland-Cliffs is forfeiting
- 1/3: Share of U.S. steel emissions from coal-fired furnaces
- 2025: Year more steelmakers are expected to reassess green projects
Steel industry watchers were stunned this week as Cleveland-Cliffs confirmed it has ditched a $500 million hydrogen-based steelmaking project in Middletown, Ohio. The decision comes as the company pivots back to its tried-and-tested coal-fired blast furnace, despite previous plans to swap fossil fuels for green hydrogen.
The canceled project—once touted as a radical step toward low-carbon U.S. steel—won’t move forward. Instead, Cleveland-Cliffs CEO Lourenco Goncalves revealed the company would double down on more traditional methods, citing a stark shift in support from the federal government under the new Trump administration.
Why Did Cleveland-Cliffs Walk Away From Hydrogen?
Goncalves explained the economics: even with a hefty $500 million grant awarded by the U.S. Department of Energy, Cleveland-Cliffs faced a staggering $1.1 billion shortfall to transform its coal furnace into a hydrogen-based plant. Company executives saw little hope that federal support would continue, making the risk too great.
This retreat marks a wider industry skepticism in 2025, with rising costs and shifting political winds forcing steelmakers to rethink big green bets for now.
What Does This Mean for Green Steel in America?
Cleveland-Cliffs’ decision puts the brakes on what would have been a model U.S. green steel plant. Instead, the firm will nurse its coal-fired furnace through at least the rest of the decade. For the climate, that means one of the Midwest’s largest emitters will keep running on decades-old tech, producing carbon at levels public advocates hoped would soon vanish.
According to analysts, the pause isn’t isolated. Industry giants like SSAB and ArcelorMittal are now taking a hard look at costs, policy, and return on investment before betting big on the hydrogen future. Until policy and energy markets stabilize, momentum for hydrogen in U.S. steel appears slowed.
How Does This Affect Ohio’s Economy and Jobs?
The choice to stick with coal offers short-term job security for hundreds in Middletown, whose livelihoods depend on the current furnace. But local leaders admit it’s a missed opportunity for new, high-tech roles in clean manufacturing. Looking ahead, regional planners may need to pivot strategies as green funding faces uncertainty.
Can Hydrogen Steelmaking Still Succeed?
While Cleveland-Cliffs is backing off, industry experts stress hydrogen steel is likely to remain the medium- to long-term standard—just not in the immediate future for the U.S. Plants in Europe and Asia continue experimenting, awaiting cost drops and clearer policy signals. Watch for renewed momentum if energy prices stabilize or new incentives emerge in Washington.
In the meantime, U.S. climate and manufacturing advocates continue to press for policies that bridge gaps and incentivize companies to take big green leaps.
Steel’s future hangs in the balance—will your state be next to choose between coal and hydrogen?
Action Checklist:
- Track DOE energy grants and future hydrogen funding shifts
- Watch for steelmakers’ Q2 and Q3 earnings for project updates
- Monitor local job board for new roles or retraining opportunities in the steel sector
- Connect with policy makers to advocate for sustainable manufacturing incentives
Stay informed—follow developments at energy.gov and leading steel news outlets.
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