The U.S. government is considering canceling or rescinding billions of dollars in previously awarded funding for clean-energy and carbon management projects in a continued effort to alter the trajectory of climate investment.
According to a list obtained by Reuters, the Department of Energy (DOE) is reviewing awards across a wide array of sectors, from auto manufacturing to direct air capture hubs. Among the proposed cancellations are two major direct air capture (DAC) hub awards given during the Biden administration, including one involving oil company Occidental.
Other high-profile projects under threat include:
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A $500 million grant to General Motors to convert its Lansing Grand River plant in Michigan for EV production.
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$335 million for Stellantis to convert the shuttered Belvidere, Illinois plant to build mid-size electric trucks.
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$250 million for Stellantis to repurpose its Indiana Transmission plant to produce EV components.
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Smaller awards such as $32 million to Hyundai Mobis (for plug-in hybrid components), $89 million to Harley-Davidson (EV motorcycles), $80 million to Blue Bird (electric school buses), and $75 million to Cummins (zero-emission powertrains).
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$208 million for the Volvo Group to upgrade EV production capacity in plants across Maryland, Virginia and Pennsylvania.
Last week, the DOE moved to cancel another $7.56 billion across 321 financial awards in 223 clean-energy projects, citing concerns that many do not offer sufficient returns to taxpayers or align with national energy priorities.
There was a strong alignment between the projects that were targeted last week and states governed by Democrats or that voted Democratic in recent elections. White House budget director Russ Vought flagged that the climate-related funding would be terminated in 16 Democrat-led states, including California and New York.
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Critics argue these moves reflect political motivations, rather than purely economic judgments. “This is yet another blow by the Trump administration against innovative technology, jobs and the clean energy needed to meet skyrocketing demand,” said Jackie Wong of the Natural Resources Defense Council.
This wave of rescissions builds on even earlier efforts by this administration. In May 2025, the DOE cancelled 24 clean energy projects totaling over $3.7 billion, focused heavily on carbon capture, industrial decarbonization, and hydrogen infrastructure.
Among those earlier cuts were $331 million for a carbon-reduction olefins project at Exxon’s Baytown, $500 million to Heidelberg Materials in Louisiana, and $375 million to Eastman Chemical in Texas.
DOE maintains that these decisions are driven by a new internal policy launched in May 2025. The policy, “Ensuring Responsibility for Financial Assistance”, requires case-by-case reviews, additional documentation from awardees, and stricter economic viability standards.
The optics of cutting direct air capture and carbon capture projects may create tension with the fossil fuel sector’s interest in carbon reinjection and enhanced oil recovery. DAC projects, in particular, have found support from oil and gas companies, because captured CO? can be channeled into existing fields.
By Charles Kennedy for Oilprice.com
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