Dive Brief:
- Cleveland-Cliffs will invest $1 billion upgrading its blast furnace and other steel infrastructure in Middletown, Ohio, over the next four years, the company said Friday. Half of the funding is supported by a reworked U.S. Department of Energy grant awarded during the Biden administration.
- The Middletown investment originally focused on implementing low-emissions technologies. Instead, it now includes a blast furnace relining, as well as upgrades to the facility’s advanced material handling infrastructure and artificial intelligence-powered control technologies, according to a news release. Construction is expected to begin in the coming weeks.
- The project also includes an advanced cogeneration facility designed to capture blast furnace gas to generate electricity and steam for on-site consumption, which Cleveland-Cliffs said will improve overall energy efficiency. Environmental groups are pushing back on the reworked plan.
Dive Insight:
The Middletown Works facility is considered to be Cleveland-Cliffs’ flagship plant for producing automotive steel, with the capacity to produce 3 million tons of raw steel per year. The project would maintain current production levels while “improving operational reliability, productivity, energy efficiency, and cost competitiveness,” the company said in a news release.
Cleveland-Cliffs worked with the Energy Department to change the scope of its 2024 project, which would have replaced its existing blast furnace with a hydrogen-ready direct reduced iron plant and two electric melting furnaces. The agency earmarked up to $500 million through its Industrial Demonstrations Program for the project.
At the time, the company said the changes would have significantly reduced production costs and carbon emissions intensity, making Middletown Works one of its most advanced, low-emissions facilities.
However, market conditions have shifted. The Trump administration has rolled back federal decarbonization projects and canceled billions of dollars in clean energy grants. At the same time, tariffs have disrupted the global trade landscape and made U.S. steel prices more competitive, creating a favorable backdrop for domestic producers.
“Cleveland-Cliffs determined that the business case for the original project scope no longer made sense given customers’ unwillingness to pay a ‘green premium’ for steel,” the Energy Department said in a separate news release. “Working with DOE, Cleveland-Cliffs identified a viable alternative that will upgrade and improve the efficiency of the existing coal-fired blast furnace while also capturing and commercializing co-product blast furnace gas.”
The Sierra Club, a California-based environmental organization, pushed back on the revised project, claiming that Cleveland-Cliffs had essentially abandoned its “clean steel” plans. The group said the cogeneration plant included in the project was standard efficiency technology that Cleveland-Cliffs already operates at its other blast furnace operations. The steelmaker is seeking an air permit for the cogeneration plant, which critics warned would increase pollution and health risk impacts, Ohio newspaper the Journal-News reported.
The original project would have eliminated roughly 1 million tons of carbon emissions annually and was considered by environmental groups to be a key part of the Biden administration’s decarbonization efforts. Today, the Middletown facility is ranked among Ohio’s top 10 industrial polluters for carbon monoxide, lead and other pollutant emissions, according to environmental think tank Industrious Labs’ analysis, which drew data from the U.S. Environmental Protection Agency.
“DOE is redirecting half a billion taxpayer dollars away from Congress’s intended purpose,” Elena Saxonhouse, Sierra Club’s managing attorney, said in a statement. “Using this massive amount of money to reinvest in out-of-date production methods proven to cause harm to people and the environment is bad business and bad policy.”
The multi-year investment is expected to begin in the coming weeks, with the blast furnace rebuild slated for the first quarter of 2030.
