US DOE Terminates USD 7.56 Billion in Federal Funding for 223 Clean Energy Projects

The US Department of Energy (DOE) has terminated 321 financial awards supporting 223 clean energy projects, cancelling USD 7.56 billion in federal funding. The move, announced on October 1, 2025, follows a sweeping review by the Trump administration, which deemed the projects economically unviable and misaligned with national energy priorities. 

The agency stated that a “thorough, individualised financial review” concluded these projects did not advance national energy needs, lacked economic viability, and would not yield a positive return on taxpayer investment.

The cancelled awards originated from six DOE offices: Clean Energy Demonstrations, Energy Efficiency and Renewable Energy (EERE), Grid Deployment, Manufacturing and Energy Supply Chains, Advanced Research Projects Agency-Energy (ARPA-E), and Fossil Energy.

Key Projects Affected

Among the terminated projects is a USD 1.2 billion award to ARCHES H2, a public-private partnership aimed at launching California’s hydrogen industry. Another major cancellation involves USD 464 million in Grid Resilience and Innovation Partnerships (GRIP) funding for transmission studies across seven Midwest states, including Minnesota, where over USD 400 million was allocated to add 28 GW of wind and solar capacity.

Additional cuts include:

• An USD 87 million grant to Sublime Systems for low-carbon cement production in Massachusetts, expected to create 70–90 jobs.

• A USD 500 million award to the Lebec Net-Zero project in California for carbon-neutral cement manufacturing.

• A USD 5 million grant to boost domestic heat pump manufacturing.

• USD 15 million for battery storage and grid upgrades serving Indigenous communities in New Mexico.

The Office of Fossil Energy and Carbon Management also cancelled 68 awards, including several regional direct air capture projects, signalling that even some climate-focused fossil fuel initiatives were not spared.

The move aligns with President Trump’s broader strategy to roll back Biden-era climate initiatives, including efforts to claw back funding from the Inflation Reduction Act (IRA) and Bipartisan Infrastructure Law. Recently, the Department of Energy (DOE) announced rolling back over USD 13 billion in unobligated federal funds previously allocated for clean energy programs.

Policy Justification 

Energy Secretary Chris Wright defended the cancellations as part of a broader effort to ensure fiscal responsibility and energy security. 

“On day one, the Energy Department began the critical task of reviewing billions of dollars in financial awards, many rushed through in the final months of the Biden administration with inadequate documentation by any reasonable business standard,” Secretary Wright said. “President Trump promised to protect taxpayer dollars and expand America’s supply of affordable, reliable, and secure energy. Today’s cancellations deliver on that commitment.” 

Furthermore, Wright revealed that the “review” of awards will continue, signalling even more such cancellations in the future.

Award recipients have 30 days to appeal the termination decisions, and some have already initiated the process. Legal challenges are expected, particularly as the DOE has not publicly released a full list of cancelled projects, drawing criticism over transparency.

Broader Context and Fallout

The funding rollback is part of a larger USD 26 billion freeze announced during the federal government shutdown, which President Trump framed as a response to Democratic opposition to his budget proposals. The administration has also targeted USD 20 billion from the Greenhouse Gas Reduction Fund and USD 7 billion from the Solar for All program.

Environmental advocates warn that the cuts will stall progress on emissions reduction, clean air, and water quality. Critics argue the cancellations undermine US competitiveness in clean technology and manufacturing, despite the administration’s stated goals of economic revitalisation. The DOE’s actions mark one of the most aggressive reversals of federal climate funding in recent history, which is bound to have ripple effects across the clean energy sector and energy transition efforts.