Cleveland-Cliffs Receives $575M to Decarbonize Tech - Smart Energy Decisions

Energy Efficiency, GHG Emissions, Industrial  -  March 26, 2024

Cleveland-Cliffs Receives $575M to Decarbonize Tech

Cleveland-Cliffs Inc., a  flat-rolled steel producer, announced that two projects were chosen for up to $575 million in total funding from the Department of Energy (DOE) to pursue two decarbonization investments at Middletown Works in Ohio and Butler Works in Pennsylvania. 

The projects will result in substantial reductions in GHG emissions across the Cliffs’ footprint.

The federal funding is being made available through DOE’s Industrial Demonstrations Program funded through the Infrastructure Investment and Jobs Act and the Inflation Reduction Act.

The Middletown Works DRI Plant and Electric Melting Furnaces could receive up to a $500 million grant. If awarded, the Company would replace its existing blast furnace at its Middletown Works Facility in Middletown, Ohio, with a 2.5mtpa Hydrogen-Ready Direct Reduced Iron (DRI) Plant and two 120 MW Electric Melting Furnaces (EMF) to feed molten iron to the existing infrastructure already on site, including the BOF, Caster, Hot Strip Mill, and various finishing facilities.

The EMF technology is well established and, along with the injection of hydrogen in blast furnaces, is a preferred route for meaningful reduction in carbon emissions for integrated steelmakers worldwide.

The process will dramatically reduce carbon emissions intensity as the facility will have the flexibility to be fueled by natural gas, which would reduce current ironmaking carbon intensity by over 50%; a mix of natural gas and clean hydrogen; or clean hydrogen, which would reduce current ironmaking carbon intensity by over 90%.

Hydrogen demand from this flex-fuel DRI plant stands to support DOE’s Hydrogen Earthshot and DOE’s Hydrogen hub initiatives.

The Butler Works Induction Reheat Furnaces could receive up to a $75 million grant. If awarded, Cliffs would also replace two of its existing natural-gas fired high-temperature slab reheat furnaces at Butler Works in Butler, Pennsylvania, with four Electrified Induction Slab Reheat Furnaces to bring optimum efficiency to its production of electrical steels, a critical component of the electrification of the U.S. and the greening of the electrical grid.

The primary benefits of this project are lower carbon emissions, substantially reduced energy costs and improvements in slab quality, allowing for approximately 25,000 tons of additional production capacity from improved process yield. 

This investment will secure 1,300 jobs at Butler Works, where employees are represented by the United Auto Workers (UAW). The project will require 220 building trades jobs at peak construction.

The company also expects to generate approximately $80 million in annual cost savings and yield improvements following the installation of the new equipment. The net cost of this facility to Cliffs is expected to be $100 million spent over a 4-year period.

“Completion of our $1 billion clean hydrogen-ready Toledo DR Plant through the depths of COVID stood as strong evidence of Cliffs’ expertise and resolve to drive down emissions. We are grateful for the support of the Department of Energy and their recognition of Cleveland-Cliffs’ strong leadership in steel decarbonization,” Lourenco Goncalves, Cliffs’ Chairman, President, and Chief Executive Officer, said in a statement. “Through these selections, DOE recognized and rewarded Cleveland-Cliffs’ track record of successfully executing large capital projects that result in operational efficiencies and lower GHG emissions.”

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