Department of Energy Announces $6 Billion Funding Opportunity for Industrial Decarbonization and Emissions Reduction Projects

The Office of Clean Energy Demonstrations (OCED), in collaboration with the Office of Manufacturing and Energy Supply Chains (MESC) and the Industrial Efficiency and Decarbonization Office (IEDO), manages this program and will provide up to 50% of the cost of each project. When combined with private sector cost share, this award represents more than $12 billion in opportunity to catalyze high-impact, large-scale, transformational advanced industrial facilities capable of manufacturing products and materials with low-carbon footprints.

Industrial emissions account for roughly one third of our carbon footprint; the industrial sector is considered one of the most difficult to decarbonize due to the diversity of energy inputs, processes and operations. The sector’s emissions result not just from fuel for heat and power, but also from feedstocks and processes that are inherently carbon intensive. Widespread demonstration and deployment of low-carbon projects within these industries will support President Biden’s initiative to rebuild U.S. leadership in manufacturing as countries, companies and consumers around the world shift to low- to no-carbon commodities to meet their own decarbonization.

Because of the transformational potential of DOE’s funding, DOE seeks first- or early-of-a-kind commercial-scale projects. These could include new technologies that have been proven at a pilot scale but have yet to be deployed commercially, technologies that are being pursued internationally but are first-of-their-kind in the United States, or other early-of-a-kind projects that face market or adoption risks. Eligible projects should be commercial-scale or commercially relevant, include a path from demonstration to deployment that includes sustained operation after completion, and have the goal of enabling widespread, non-federally funded follow-on investments after the project period.

Potential opportunities for decarbonization could include:

• Conversion of existing iron and steelmaking thermal processes to utilize clean fuels, including the integration of hydrogen;
• Producers of decarbonized feedstock, such as low-carbon hydrogen or renewable fuels;
• Advanced energy facilities to provide low-carbon process heating, such as advanced nuclear;
• Carbon capture and novel utilization for captured carbon;
• Waste heat capture and utilization;
• Electrification of paper drying processes;
• Energy savings in ceramics production through more efficient kilns; and
• Alternatives to fossil-derived feedstocks for petrochemical products.

Applications will be selected based on multiple factors that exhibit the expectations and details described throughout the Funding Opportunity Announcement (FOA). Priority will be given to projects that exhibit: the deepest greenhouse gas (GHG) emissions reduction potential; facility readiness and ability to act quickly; clean product market viability; community benefits; and adherence to statutory priority consideration factors. DOE may choose to prioritize applicants that are focused on, and best prepared to, transition their entire ecosystem to clean products.

Additionally, awards selected under this FOA will adhere to a four-phased structure for managing scope, schedule, deliverables and budget. The phases will cover initial planning and analysis activities; finalization of engineering designs, business development and permitting; installation, integration and construction; and ramp-up to full operations. DOE is soliciting applications from projects at all four phases of proposed activities. Projects which have completed initial phases will be eligible for accelerated early reviews.

Interested applicants should submit a Community Benefits Plan to ensure they are meaningfully engaging with the surrounding communities by creating quality jobs and investing in the American workforce; advancing diversity, equity, inclusion and accessibility; and supporting environmental justice. Prime recipients must be domestic entities (this requirement may be waived by DOE), but this does not preclude roles for non-U.S. companies.

Full details of the FOA can be accessed here. Concept papers are due by 5:00 pm ET on April 21, 2023, and full applications are due by 5:00 pm ET on August 4, 2023. Pillsbury’s top-rated nuclear and government contracts teams stand ready to assist interested applicants with interpreting guidance and drafting applications.