The Department of Energy has canceled more than $700 million in battery and manufacturing awards, advancing the Trump administration’s efforts to nix Biden-era energy projects.
DOE told POLITICO’s E&E News on Friday that it canceled the five grants during the second week of October. The cuts appear to be the first that DOE has confirmed from a list of targeted projects circulating among lobbyists. Until now, it was unclear if DOE planned to move forward with scrapping any of the more than $20 billion in awards on the list.
The $700 million covers grants that the Biden administration awarded to battery companies Ascend Elements, American Battery Technology Co., Anovion and ICL Specialty Products, as well as a glass manufacturer LuxWall, according to DOE.
The projects “had missed milestones, and it was determined they did not adequately advance the nation’s energy needs, were not economically viable, and would not provide a positive return on investment of taxpayer dollars,” DOE spokesperson Ben Dietderich said in a statement. He did not specify the milestones that DOE says the projects missed.
The cancellations are some of the largest to date of advanced battery manufacturing projects, affecting plans to build landmark plants in red states like Kentucky and Missouri. That distinguishes them from DOE’s initial tranche of $7.56 billion in terminations, which mainly affected projects in states won by former Vice President Kamala Harris in last year’s presidential election.
Those earlier cancellations included less than $175 million in funding cuts from DOE’s Manufacturing and Energy Supply Chains Office (MESC) . The newly canceled funding totals approximately $718 million from the same office, affecting initiatives to manufacture components for electric vehicles and grid batteries.
Energy Secretary Chris Wright and other Trump administration officials have been critical of federal funding of electric vehicles and renewables, which often work in tandem with batteries.
Wright has been leading a broad review of projects, following criteria outlined in a May memo. He defended funding cuts this month, saying that projects “have cancellation clauses.”
“If they’re not in the interest of the taxpayers, if they’re not a good expenditure of the money, you always have the ability to cancel these projects,” he said.
Democrats charge that DOE’s actions are illegal and will hurt the economy and slash jobs. Last week, 37 Democratic and independent senators said in a letter to Wright that “the illegality of your cancellations is the only thing as indisputable as the harm your cancellations will wreak.”
The department “must expend these funds and faithfully execute the law, including many programs that have strict requirements for the timing of fund expenditure, purposes, and contractual expectations,” the lawmakers said.
From Alabama to Michigan
The nixed grants affect projects backed by the 2021 bipartisan infrastructure law.
The $197.3 million award to ICL Specialty Products was slated to help build a plant in St. Louis producing 30,000 metric tons annually of lithium-ion phosphate powder for the battery industry. The company did not respond to request for comment but said in a Securities and Exchange Commission filing last week that it was “reviewing DOE’s announcement and the implications thereof.”
The largest canceled award — $316 million to Ascend Elements — was intended to support the manufacture of components from recycled electric vehicle batteries at a planned $1 billion plant in Hopkinsville, Kentucky. The battery components would compete with supply that now comes primarily from China, the company said.
“The DOE’s decision regarding the grant doesn’t change our trajectory. We’re moving forward,” Linh Austin, president and CEO of the company, said last Thursday to E&E News.
“Our funding path is diversified well beyond DOE. We are replacing the remaining unused portion of the DOE grant with a mix of other sources of funding available to the company including equity, project finance, municipal bonds, and other forms of debt.”
According to the Massachusetts-based company, $206 million of the DOE award had been disbursed, so the cancellation would affect the roughly remaining $110 million.
The $57.7 million grant to American Battery Technology Co. was meant to support construction of a Nevada plant to produce lithium hydroxide for batteries.
The company said it received a notice from DOE on Oct. 9 about the axed funding, which it plans to appeal, according to a filing with the Securities and Exchange Commission. It said there was roughly $52 million remaining to be disbursed from DOE, although the company said it has raised the same amount in public markets.
“Regardless of the outcome of the appeal process, the Company intends to move forward with the project without impact to timeline or scope,” the filing said. The filing added that Trump’s National Energy Dominance Council supported the project as a priority, and the administration has selected it for expedited permitting.
“All evidence demonstrates that this critical minerals project aligns with the administration’s mission and key priorities,” said American Battery Technology Co. CEO Ryan Melsert in an email
Melsert also told POLITICO on Friday that he was puzzled by DOE’s action, considering the administration’s earlier support of the project.
“Sometimes different agencies don’t communicate with each other, and we want to make sure this is really the decision of the administration,” Melsert said.
The $117 million award to Anovion was intended to support production of synthetic graphite for lithium-ion battery anodes, including through construction of a large plant in Alabama. Anovion did not respond to a request for comment on Friday.
LuxWall planned to use its $31.7 million DOE grant for construction of an advanced glass factory at the site of an old coal plant in Detroit. In announcing the funding in 2023, the Biden administration said the company’s products would support energy efficient windows that could help slash building emissions.
LuxWall said Saturday that it plans to appeal DOE’s decision to nix the grant.
It’s unclear if DOE intends to move forward with other cancellations on the $20 billion list. After the announcement of $7.56 billion in funding cuts, Wright told CNN there would be “many more” cancellations this fall.
The circulating list has angered Democrats and prompted several Republicans to pressure DOE to save projects in their states.
Sen. Shelley Moore Capito (R-W.Va.), for example, has said that funding for a “blue” hydrogen project in Appalachia that would use natural gas and carbon capture should not be eliminated. To date, DOE has canceled more than $2 billion in funding for two hydrogen hubs on the West Coast focused on producing the fuel with renewables.
Reporter Hannah Northey contributed.
Correction: An earlier version of this story cited a $200 billion Department of Energy list. The amount is $20 billion.
