Mother Jones illustration; Beata Zawrzel/Zuma; Zbynek Burival
This story was originally published by Canary Media and is reproduced here as part of the Climate Desk collaboration.
The Office of Clean Energy Demonstrations was supposed to be a launchpad for ambitious projects to help America lead the way on cleaner power and manufacturing. Now it’s been reduced to a shell of itself.
As the Trump administration slashes spending and fires workers across the federal government, the US Department of Energy has emerged as one of the hardest-hit agencies—and perhaps no other of its divisions has been singled out as deliberately as OCED.
It’s a dramatic reversal for the four-year-old office. During the Biden administration, Congress endowed it with nearly $27 billion to try to scale up cutting-edge technologies that could curb planet-warming pollution from industrial facilities and power plants. Trump officials have in recent months hollowed out the office, canceling billions in previously issued awards for everything from low-carbon chemical manufacturing to rural energy resiliency, while also dismissing over three-quarters of its employees.
The situation is best summarized by the budget the White House has requested for OCED for the next fiscal year: $0.
Experts and insiders warn that the tumult within OCED and the DOE more broadly is eroding the private sector’s trust in the federal government and its ability to drive energy innovation.
“The administration has really created a chilling effect on the willingness of future early-stage technology developers to work with the Department of Energy,” said Advait Arun, a senior associate for energy finance at the Center for Public Enterprise, a nonprofit think tank.
Ultimately, that will stifle investment not only in the clean energy sectors the Trump administration dislikes but in those it has championed as well, such as advanced nuclear and geothermal. Former OCED staffers and contractors, who were granted anonymity to speak freely, told Canary Media that the disruption is a major setback for America’s efforts to launch the world’s next generation of energy technologies and industries.
“We are eliminating ourselves as a leader in the clean energy space, especially for the industrial complex,” one person said. “What I’m seeing is China is about to slip right into that position. Just logically and economically, I don’t understand the steps that are being taken.”
Congress created OCED in December 2021 to help deploy first-of-a-kind projects at commercial scale. The idea was for the government to absorb some of the risks and provide early capital to usher companies across the valley of death that lurks between promising research pilots and real-world operations that can move the needle on decarbonization.
The 2021 bipartisan infrastructure law provided OCED with about $21 billion over five years to scale up emerging technologies like small modular reactors and long-duration energy storage, and to advance ambitious “hubs” for producing hydrogen fuel and capturing carbon dioxide from the sky and smokestacks. In 2022, Congress gave OCED an additional $5.8 billion through the Inflation Reduction Act to help decarbonize US manufacturing of materials like steel, cement, and chemicals.
“A lot of this stuff is a chicken-and-egg situation, where the private sector doesn’t want to come in [and invest] yet because it’s not proven,” said Zahava Urecki, a senior policy analyst with the Bipartisan Policy Center’s Energy Program.
“But we need the technology to go through this [demonstration] process in order to make sure it becomes proven, so that eventually we can have this in society,” she added. “And that’s where the federal government plays a key role.”
Over the course of three years, the office selected 116 projects in 42 states to receive over $25 billion in federal funding. For most awards, participating companies were required to cover at least 50 percent of total costs themselves—meaning the office expected its portfolio to spur nearly $65 billion in private investment, in addition to creating potentially hundreds of thousands of jobs.
Among the biggest winners were seven regional hydrogen hubs and two major direct air capture initiatives that would remove CO2 directly from the sky. The choices were not always broadly celebrated, and critics raised concerns that the hydrogen and carbon-capture initiatives in particular would do more harm than good for the climate by propping up unproven, energy-intensive projects involving fossil-fuel companies.
But other OCED picks garnered more public applause — and supported industries that President Donald Trump had flagged as priorities. In 2024, the office selected Cleveland-Cliffs for an award of up to $500 million to begin lower-carbon steel production in Middletown, Ohio, the hometown of Vice President JD Vance. Another manufacturer, Century Aluminum, got up to $500 million to help it build the nation’s first new aluminum smelter in decades, which would be powered by carbon-free electricity.
Congressional Democrats accused the DOE of undertaking a “haphazard, disorganized, and politically driven” cancellation process.
Former OCED staffers said they attempted to brief the incoming Trump administration on the office’s portfolio and to explain how they could support the president’s stated goals of boosting “American energy dominance” and “advancing innovation.”
However, from the time Trump took office on January 20, “It became pretty clear that it didn’t really matter,” a former employee said.
It was quickly evident that Trump would, in fact, be adopting the right-wing policy platform Project 2025 after trying to distance himself from it on the campaign trail. The blueprint—which outlines ways to erase federal spending—called for eliminating “all DOE energy demonstration projects, including those in OCED,” in order to avoid “distorting the market and undermining energy reliability.”
For one staffer, “it all started crumbling” on Day 1, when the White House issued an executive order to halt federal work on “diversity, equity, and inclusion”—a measure that affected OCED’s grant recipients. Under former President Joe Biden, the office required participants to create community benefit plans to ensure the billions in taxpayer dollars went to projects that included neighbors in the planning process and supported local economies. Under Trump, the strategy became a liability.
A blitz of federal funding freezes and layoffs—and court reversals and injunctions—then ensued, creating chaos across federal agencies and for all the outside companies that hold or held government contracts. In late January, the White House extended federal workers a “deferred resignation offer” that would allow people to resign from their jobs and go on leave with pay through Sept. 30, the end of the fiscal year.
Few OCED staffers initially took the offer. But after several months of chaos, about 77 percent of workers at OCED signed the deal when the White House extended it again in April. Insiders say that figure is likely even higher now. Across the DOE, some 3,200 employees within the agency’s roughly 17,000-person workforce opted to leave.
“That’s when folks at OCED actually started to realize it was going to be personnel changes that would first impact the projects, and not the program cuts,” according to a former employee.
On May 15, about a month after the staff exodus, Energy Secretary Chris Wright said the DOE would begin scrutinizing federal grants to “identify waste of taxpayer dollars.”
The agency started requesting additional information for 179 awards totaling over $15 billion, with a focus on large-scale commercial projects. Wright claimed that these awards were “rushed out the door, particularly in the final days of the Biden administration,” and required further review to ensure that individual projects were “financially sound and economically viable.”
Less than 3 percent of the more than $25 billion in OCED’s awards portfolio had actually been paid to projects as of March 31, in part because larger grants were meant to be doled out in tranches over a long development timeline, according to EFI Foundation, a nonpartisan organization led by Ernest Moniz, who served as energy secretary during the Obama administration.
Project developers interviewed by EFI claimed that, contrary to Wright’s statement, OCED’s “due diligence was more rigorous than what private-sector investors would conduct” and that, rather than undergo the office’s laborious process, “faster decisions would have better aligned with developer timelines,” the foundation said in a June report.
Wright didn’t wait long to begin nixing projects. In late May, he announced the termination of 24 awards issued by OCED totaling over $3.7 billion, including funding for carbon capture and sequestration and projects within the office’s Industrial Demonstrations Program that aimed to reduce emissions from iron, cement, glass, and chemicals production.
“These clean energy projects were enshrined into law by bipartisan majorities and represent the will of Congress,” Sen. Martin Heinrich, Democrat from New Mexico, said in a recent statement to Canary Media. Heinrich and other congressional Democrats sent a letter to Wright on September 9 accusing the DOE of undertaking a “haphazard, disorganized, and politically driven” cancellation process.
More funding cuts arrived earlier this month, when the DOE said it was slashing 321 grants for projects almost entirely in states that voted for Democratic nominee Kamala Harris in the 2024 presidential election. A spreadsheet of the cuts lists 11 newly affected OCED projects totaling nearly $2.5 billion, including for two major hydrogen projects planned in the Pacific Northwest and California. The October list also repeats five OCED-backed initiatives that first appeared in the May announcement.
Project developers have said they’re appealing the award terminations and are in continued talks with the DOE. Still, it’s unclear how much capacity the office has anymore to helm those discussions.
Wright said in an October 3 interview that more cancellations would follow, and early last week rumors swirled about a second spreadsheet that appeared to outline deeper cuts for carbon-removal projects, hydrogen hubs, and other OCED projects. The nature of the list remains unclear, but if it proves to be a signal of cuts to come, it would cancel another $6.1 billion in awards from OCED.
The project areas that have yet to be cut—or to appear on any potential hit lists—include advanced nuclear energy and critical minerals. Additionally, the energy agency said it has started tapping OCED’s authority to make some new grants for Trump’s favorite energy source: coal-fired power plants. Should the office shutter, these awards would likely be managed by other divisions within the DOE.
Alex Kizer, a senior policy advisor at EFI, noted that gutting OCED won’t end America’s efforts to decarbonize heavy industries.
In the case of cement and steel, demand for low-carbon materials is growing within US and global markets as tech giants look to build less carbon-intensive data centers, and as state governments and European and Chinese regulators work to rein in industrial pollution. Still, losing grants—and the DOE’s seal of approval—will undoubtedly make it harder and more expensive for companies to raise private capital for commercial-scale projects. Stifling the DOE’s role as a gatherer and publisher of real-world lessons could further slow progress, Kizer said.
“The potential for breakthrough across different energy sectors is so significant,” he said of OCED’s work, noting that “a relatively small investment from taxpayers could have an enormous benefit to taxpayers over time,” in terms of delivering cleaner, more reliable energy. “Who says no to that?”
