MIDDLETOWN, Ohio — The Middletown Works steel plant will receive a federal grant of up to $500 million to replace its coal-burning blast furnace with a hybrid unit that burns hydrogen and natural gas, a project that is expected to create 1,200 construction jobs and dramatically reduce carbon emissions.
The grant was announced in Middletown Monday by U.S. Energy Secretary Jennifer Granholm, who told reporters the Biden Administration is proving job creation and environmental improvements can happen simultaneously.
“These announcements are happening every week all over the country,” Granholm said. “There’s four places in Ohio today that got industrial decarbonization grants because this president is committed to making sure that we are in partnership with industry and with unions to be competitive in this country.”
The Hydrogen-Ready Direct Reduced Iron plant is expected create 170 new jobs and retain 2,500 when it opens in 2028. It will reduce production costs by $150 feet per ton of liquid steel produced, generating annual cost savings of $450 million for the Middletown plant.
“During the last several decades, we have been bombarded with (the idea that) things that come from abroad are better and cheaper and more efficient and more technologically advanced,” Cleveland Cliffs CEO Lourenco Goncalves said. “It’s all lies. It’s all wrong.”
Cleveland Cliffs, which acquired the Middletown plant in its 2019 purchase of AK Steel, is negotiating terms of the grant with the U.S. Department of Energy.
The improvements will eliminate one of Ohio’s biggest emitters of particulate matter, or soot, according to Industrious Labs, an environmental research and advocacy firm that ranked 213 industrial facilities excluding power plants. The coal-based facility releases 1,872 tons of NOx, 2,245 tons of SO2, and 451 tons of particulate matter annually, according to the group.
"Cleveland Cliffs took meaningful action today to reduce pollution from coal-based steelmaking and instead invest in cleaner alternatives. But, to realize this investment's health and climate benefits, this facility must be powered by green hydrogen," said Hilary Lewis, steel director for Industrious Labs. "If Cliffs is able to secure 100% green hydrogen to run the new facility, it will be able to offer a truly sustainable product that is highly in demand from its key buyers, the automotive industry."
Goncalves said Cleveland Cliffs will commit to purchasing a significant percentage of the production capacity of new hydrogen suppliers, which the Biden Administration is also subsidizing.
“It’s like the chicken and egg,” Goncalves said. “Nobody uses hydrogen because there’s no hydrogen. And there’s no hydrogen because nobody uses hydrogren. So now they can run the plant at break even. Everything else that they can sell to others will be on top. So, I can make the hydrogen hub viable.”
An $8 billion initiative, the Regional Clean Hydrogen Hubs Program aims to establish up to ten regional ecosystems that promote increased production and use of hydrogen in carbon-intensive industries like automotive, steel and cement.
“They will be producing hydrogen in Ohio for off-take to places like this,” Granholm said. “And that is a whole series of jobs. That’s an economic cluster around the creation of clean hydrogen.”
If hydrogen takes hold in the region, it could offset the loss of jobs at Sun Coke Energy Inc. The publicly traded company operates a factory near the Middletown Works that produces coke, an ingredient that purifies steel while causing particulate pollution.
"The days of coke in Middletown are numbered," Goncalves said. "Sun Coke produces coke. Coke goes inside a blast furnace. This blast furnace will cease to operate."
