The Biden administration is poised to offer $6 billion in grants to assist companies in reducing emissions from metal, chemical, and other industries where carbon removal is challenging.
This includes funding for the construction of the first new aluminum smelter in the United States in 45 years.
Century Aluminum, previously a beneficiary of former President Trump’s trade war with China, is set to receive $500 million in funding to build an aluminum smelting facility, according to a statement released on Monday.
This will nearly double the country’s current domestic production of the energy-intensive metal while reducing emissions by approximately 75%.
Domestic aluminum production, used in manufacturing solar panels, semiconductors, and fighter jets, has been steadily declining despite increasing demand. This decline is partially attributed to Biden’s climate legislation, which has increased the consumption of materials necessary for energy transition processes.
Joe Kooyman, Vice President of SAFE, a Washington-based research center supporting energy independence in the United States, stated, “The importance of this grant for the domestic aluminum sector cannot be overstated.”
He added, “Building a new domestic smelter brings the United States back into its critical role and mitigates our decades-long decline in primary aluminum production.”
The project is one of 33 selected to receive $500 million grants each as part of the Department of Energy’s program to reduce greenhouse gas emissions from energy-intensive manufacturing industries, stimulate industrial groups, and enhance manufacturing competitiveness in the United States.
These funds will target sectors responsible for a quarter of America’s emissions. However, transitioning to low-carbon technologies is a challenging and costly process.
Reducing emissions from these sectors is crucial if the White House aims to achieve its goal of reducing greenhouse gas emissions by 50% by 2030 and achieving net-zero emissions by mid-century.
Overall, the Biden administration expects these projects to reduce over 14 million tons of carbon dioxide emissions annually, equivalent to the emissions from three million gasoline-powered cars each year.
Energy Secretary Jennifer Granholm stated, “These investments will reduce emissions from sectors where carbon removal is challenging and ensure that American companies and workers remain at the forefront of the global economy.”
The White House announced that Century Aluminum is considering suitable locations for building the new smelter along the Mississippi River basin.
Once completed, the facility will produce high-purity metal used in defense applications and create a thousand new direct jobs for members of the United Steelworkers union, which has received significant support from Biden and recently endorsed his reelection bid.
Other grants announced by the Department of Energy include up to $500 million for Cleveland-Cliffs to manufacture steel for plans to install equipment allowing steel production using hydrogen and electric arc furnaces at its Middletown Works plant in Ohio.
The company also received an additional $75 million to transition to producing specialty steel using electricity at its Butler Works facility north of Pittsburgh.
Hydrogen-related projects received significant funding as well. Exxon Mobil received up to $332 million for a project to substitute hydrogen for natural gas in ethylene production in Baytown, Texas, while Kraft Heinz Co received up to $171 million for a “carbon removal at food facilities” project to convert some manufacturing facilities to operate on electricity.
Heidelberg Materials, a subsidiary of AG in the United States, received $500 million to build a carbon removal project for cement manufacturing, and Eastman Chemical received up to $375 million to build a first-of-its-kind molecular recycling facility for plastics.
Christina Theodoridi, Director of Industrial Policy at the Natural Resources Defense Council, commented, “If these projects are executed properly, they can put us on the right path to cleaner production of essential products for the modern economy, while stimulating the creation of good jobs.”
