It’s been nearly a year since Cleveland-Cliffs announced it’s deserting its initiative to decarbonize its Middletown steelworks with hydrogen.
Now, the manufacturer has applied for an air permit to prolong its fossil fuel-burning future for the next few decades.
Its filings to Ohio permitting agencies call for refurbishing its blast furnace from the 1950s and installing a co-generation plant to capture and reuse excess gas produced from steelmaking.
Residents and environmentalists fear the company will be short-changing the community on emissions reductions, should it bring the plan to bear.
And currently, it’s unclear whether the company will use hundreds of millions of public dollars from the Biden-era intended for industrial decarbonization to carry out the maintenance project.
A transition that was cut short
Two years ago Cleveland-Cliffs unveiled plans for an ambitious transformation.
It wanted to swap the Middletown steel plant’s coal and coke-fired blast furnaces it uses to make steel with 100% electric furnaces that can be fueled by hydrogen. That’s after the U.S. Department of Energy awarded the manufacturer over $500 million in Inflation Reduction Act funds.
Cleveland-Cliffs once estimated it's Middletown project would reduce 1 million tons of greenhouse gas emissions annually, add 170 jobs and preserve 2,500 more.
The project served as a bellwether for the Biden administration's Industrial Demonstrations Program. It sought to incentivize companies in hard-to-abate sectors like steel, cement and chemicals to decarbonize “in the race to lead the world in low- and net-zero carbon manufacturing.”
Then-Energy secretary Jennifer Granholm toured the Middletown plant for the announcement in 2024. She said they wanted the changes there to be replicated across the country.
“We don’t want to just make the best products in the world — and we will — we want to make sure that we make the best and cleanest products in the world,” said Granholm in Middletown in 2024.
Cliffs once estimated this project would reduce 1 million tons of greenhouse gas emissions annually, add 170 jobs and preserve 2,500 more.
Community members celebrated the expected health and quality-of-life improvements; hydrogen doesn’t create carbon emissions when burned, with its primary byproduct being water.
But once President Trump started his second term, U.S. government leaders retreated from federal investments in climate change mitigation. Many of the plans for U.S. hydrogen generation went offline.
In an earnings call last summer, Cleveland-Cliffs CEO Lourenco Goncalves told shareholders the hydrogen project wasn’t cancelled by the DOE, but that the company told the department it wouldn’t be pursuing it since “it’s clear by now that we will not have availability of hydrogen.”
He said there was “a very good conversation with the current DOE on revamping that project in a way that we preserve and enhance Middletown using beautiful coal, beautiful coke, beautiful natural gas.”
In that call, Goncalves also alluded to a plan to fully operate a blast furnace using AI.
Records reveal Cleveland-Cliffs doubling down on coal
Cleveland-Cliffs’ new air permit it submitted in February cements the hydrogen project as a distant memory.
“A child that's born in Middletown this year will graduate high school with the same furnace burning on the horizon of the community that they live in."
WYSO obtained that permit application submitted to the Southwest Ohio Air Quality Agency through a public records request. Referred to as the Energy Recovery and Advanced Efficient Ironmaking Project in application documents, it calls for refurbishing the 73-year old No.3 blast furnace.
The company hasn’t announced the plan to the public.
Ariana Criste works as deputy communications director with Industrious Labs, a nonprofit focused on decarbonizing heavy industry. She explained that this is a costly maintenance measure that’s typically completed on a furnace every 15-20 years.
This proposal, she said, signals a plan that will give the pollution-burdened community more of the same problems. A 2024 Industrious Labs report finds that Butler County has the third highest health risk of all counties in Ohio, based on available data.
“A child that's born in Middletown this year will graduate high school with the same furnace burning on the horizon of the community that they live in,” Criste said. “So this project will extend the life of this furnace well into the 2040s at a time when global steelmakers are increasingly beginning to move away from coal-based steelmaking.”
Cliffs also wants to install a co-generation plant. Instead of the byproduct gas produced from iron being flared off, the company would capture it to generate steam and electricity to partially power the mill.
Cleveland-Cliffs and other steelmakers use this technology at other plants across the country, Criste said, but reports from watchdog groups don’t indicate a decrease in clean air violations from these sites.
“So it makes the existing dirty coal-based steel-making process somewhat less wasteful, but it actually does nothing to reduce the carbon and health-harming pollution that's the central problem in coal-based iron making,” she said.
Southwest Ohio clean air advocate Marilyn Wall said she, along with Middletown resident Donna Ballinger, are trying to notify neighbors of the plan.
They also had to request public records from the permitting agency to see Cleveland-Cliffs’ proposal.
“I think part of what is really challenging for the community is that it's a really complicated application, and it's hard to figure out what exactly they're doing and how much difference this would be compared to the flaring they're doing now, because they're obviously emitting pollutants along with that,” Wall said.
'We just don't know if that public money is still being used'
Refurbishing the furnace will likely cost hundreds of millions of dollars.
Like Goncalves indicated on that July earning call, Ian Wells, lead on industrial decarbonization with the National Resources Defense Council said the hydrogen project at Cleveland-Cliffs hadn’t appeared on the list of projects explicitly cancelled by the DOE.
“There's a chance that they've attempted to rescope the project, that they're still planning to use funding under the Industrial Demonstrations (Program), but for a different purpose,” Wells said.
“And I think the challenge that we have is we just don't know if that public money is still being used, and if so, how it's being used.”
The viability of this project might be contingent on access to the grant money.
In Cleveland-Cliffs’ application, it states the company plans to begin construction on its energy recovery project by Sept. 29 this year. According to the terms of the grant it received from the DOE, the money must be appropriated by Sept. 30.
In Cliffs’ most recent earnings call from April 20, Goncalves said the “Middletown Works project has received clear affirmation that the project will proceed once the updated scope is finally approved, and we are now in the final stages of completing that work.”
It’s also not clear if the company is allowed to repurpose that $500 million dollar grant.
Natural Resources Defense Council has sued the Department of Energy to release records that spell out the rationale behind project and program terminations, as well as any plans to offer additional clean energy awards.
The U.S. Department of Energy and Cleveland-Cliffs didn’t respond to WYSO’s multiple requests for comment.
What happens next
As far as the permit goes, Criste said Cleveland-Cliffs doesn’t have a lot of cash on hand, and that means the community could influence the outcome.
“So pushback, advocacy, things that slow this project down, all shift the calculus for the company away from supporting a relining at this facility,” Criste said.
The Ohio EPA hasn’t made a decision on the application. But the agency said there will be a 30-day public comment period once a draft permit is available.
And the agency can schedule a public hearing on that draft permit if there’s enough public interest.
