“We told folks they needed to have shovels in the ground and be ready,” said a former IDP official who spoke to Canary Media on condition of anonymity.
Given another six months to advance the program, the official said, “these projects would have gotten far enough that the new administration wouldn’t be able to unwind them.”
“The administration should be seeing this as a feather in their cap, because the program definitely aligns with their priorities,” the former official said.
The cuts appear to be the result of DOGE trouncing its rival political factions within the new administration at the Energy Department, who may have recognized the value of federal investments in industrial projects, said Hilary Lewis, the steel director at the climate advocacy nonprofit Industrious Labs.
“Who would want these plants closed? Maybe the coal industry? The coal industry isn’t lobbying for killing these projects, but they stand to benefit if we get in the way of innovation and technology improvements,” she said. “Practically and politically speaking, though, the group that’s trying to stop this is DOGE. They’re just trying to cut all federal funding, no matter how much good it does.”
If MAGA’s pro-development wing had hoped DOGE’s mission would wind down once its billionaire leader turned his attention back to his private-sector duties at Tesla, SpaceX, and X, the recent shakeup of top staff at the Energy Department implies otherwise. Last week, Energy Secretary Chris Wright promoted Carl Coe, who led DOGE for its first 100 days, to chief of staff.
Some projects may still survive without federal funding, even if timelines get pushed back.
IDP grant recipients with deep balance sheets and easy access to capital could fund their own projects. Exxon Mobil Corp., for example, has made the low-carbon hydrogen plant at its Baytown, Texas, refinery a key priority. Yesterday it inked a long-term supply deal to annually provide 250,000 metric tons of low-carbon ammonia to Japanese firm Marubeni. Without the nearly $332 million the IDP promised the oil giant, however, the project may take longer to complete.
But a startup such as Skyven Technologies may struggle to build the nation’s first industrial-steam-generating heat pump in Western New York without the $145 million the IDP offered.
Few states have the capacity to replace the federal funding on their own, said Archie Fraser, who leads research on decarbonization and energy efficiency for the industrial team at the American Council for an Energy-Efficient Economy.
“The Industrial Demonstrations Program is a unique and exciting federal program that I think a lot of the states are not necessarily positioned to continue if the funding goes away,” he said.
Even with federal support, the U.S. has lagged far behind China in subsidizing new industrial plants. Just last year, China launched nearly twice the number of low-carbon industrial demonstration projects as the IDP funded. This year, Beijing rolled out a second batch of more than 100 new projects.
“It’s hard to overstate how much these cuts really undermine the administration’s stated mission of outcompeting China,” said Marcela Mulholland, a former official at the Office of Clean Energy Demonstrations who now leads advocacy at the nonpartisan climate group Clean Tomorrow. “While we’re fighting about DOGE, China is barreling forward.”
She added, “It’s bleak.”
