DOE Scraps $3.7B in OCED Projects, Upending Carbon Capture Progress at Power Plants

The Department of Energy’s (DOE’s) abrupt termination of 24 previously awarded projects—including four prominent power-related carbon capture projects— will rescind $3.7 billion in financial assistance from its Office of Clean Energy Demonstrations (OCED).

In a terse press release on May 30, the DOE cited “a thorough and individualized financial review” in its justification for canceling the awards, asserting the projects “failed to advance the energy needs of the American people, were not economically viable and would not generate a positive return on investment.” Nearly 70% of the projects, the agency noted, had been signed between Election Day and Jan. 20.

Over the past week, speculation has mounted about which projects were terminated. The DOE shared the names of the projects with POWER on June 3, but it did not provide project-specific justifications or documentation supporting its economic viability claims.

Recipient	Execution Date	Award Amount	Project Location
SUTTER CCUS, LLC	12/31/2024	$270,000,000	Yuba City, CA
Calpine Texas CCUS Holdings, LLC	12/31/2024	$270,000,000	Baytown, TX
Research Triangle Institute	12/31/2024	$4,304,715	Vicksburg, MI
PPL Corporation	12/31/2024	$72,016,473	Louisville, KY
TDA Research, Inc.	12/31/2024	$49,032,200	Gillette, WY
Brimstone Energy, Inc.	12/31/2024	$189,000,000	TBD
Technip	12/16/2024	$200,000,000	Gulf Coast Location TBD
Orsted Star P2X LLC	12/9/2024	$99,000,000	Chambers County, TX
Gallo Glass Company	12/4/2024	$75,000,000	Gallo Modesto, CA
American Cast Iron Pipe Company	11/25/2024	$75,000,000	Birmingham, AL
United States Pipe and Foundry Company, LLC	9/17/2024	$75,500,000	Bessemer, AL
Heidelberg Materials US, Inc.	8/12/2024	$500,000,000	Louisiana
Libbey Glass LLC	9/9/2024	$45,133,953	Toledo, OH
Owens-Brockway Glass Container Incorporated	1/6/2025	$57,263,726	Zanesville, OH
Skyven Technologies, Inc.	1/14/2025	$15,316,593	Medina, NY
Kraft Heinz Food Co	11/15/2024	$170,881,459	10 Locations
Eastman Chemical Company	9/12/2024	$375,000,000	Longview, TX
Diageo Americas Supply, Inc.	12/16/2024	$75,000,000	Shelbyville, KY & Plainfield, IL
Sublime Systems	11/4/2024	$86,907,197	Holyoke, MA
National Cement Company of California, Inc.	12/4/2024	$500,000,000	Lebec, CA
Exxon Mobil Corporation	12/17/2024	$331,885,548	Baytown, TX
Nippon Dynawave Packaging	12/16/2024	$46,594,001	Longview, WA
Kohler Co.	10/22/2024	$51,200,000	Casa Grande, AZ
Nevada Gold Mines, LLC	10/31/2024	$95,000,000	Eureka County, NV

Power Sector Projects Among Hardest Hit

Among the rescinded awards are four major carbon capture initiatives tied directly to coal-fired and natural gas–fired power plants. These fall under the $2.537 billion Carbon Capture Demonstrations program and the $937 million Carbon Capture Large-Scale Pilots program, which are part of the DOE’s mandate under the 2021-enacted Infrastructure Investment and Jobs Act (IIJA).

Terminated awards under the Carbon Capture Demonstration Program include at least two projects that the Biden administration picked in December 2023 following a merit review.

Sutter CCUS ($270 million)—Yuba City, California. Led by Sutter CCUS, an indirect Calpine subsidiary, the project proposed for Yuba City, California, received $8.6 million for Phase 1 of the project on August 2024. Sutter will capture up to 1.75 million metric tons of CO2 each year, using ION Clean Energy solvent, from the 550-MW Sutter Energy Center (SEC), transport it and sequester it permanently underground in saline geologic formations. The gas-fired project consists of two combustion turbine generators, two heat recovery steam generators with duct burners, and a single condensing steam turbine generator.

Calpine Texas CCUS Holdings, LLC ($270 million)—Baytown, Texas. Calpine Texas CCUS Holdings received $270 million for Phase 1 of the project in July 2024. The Baytown, Texas, project was set to seek to capture up to 2 million metric tons of CO2 annually from the 810-MW baseload NGCC in Baytown, Texas, using Shell’s CANSOLV technology. The project, composed of three combustion turbines with three heat recovery steam generators, is set to demonstrate the first full-scale implementation of CCS technology at a natural gas combined cycle power plant in the U.S. The project planned to sequester the CO2 in saline storage sites on the Gulf Coast. The year-long first phase will involve completing an integrated FEED, workforce planning, project permitting, and environmental reviews.

Two terminated awards are affiliated with the DOE’s Carbon Capture Large-Scale Pilot Projects Program. The DOE announced the projects were selected in February 2024 following a merit review process.

Cane Run 7 Carbon Capture Project in Kentucky. PPL Corp.’s Cane Run Generating Station in Louisville, Kentucky, in September 2024, received $4.9 million from a total OCED award of up to $72 million to kick off Phase 1 activities. The project aims to capture 95% of CO2 emissions from a portion of the gas power plant’s flue gas using advanced heat-integrated technology developed by the University of Kentucky, targeting 67,000 metric tons of CO2 per year. Phase 1 activities, which will span 18 to 21 months, include a front-end engineering design (FEED) study, workforce planning, project permitting, and environmental reviews. The project, a key step toward assessing carbon capture viability on natural gas units, involves collaboration with EPRI, Siemens Energy, and Koch Modular Process Systems.

Dry Fork Carbon Capture Pilot in Wyoming. TDA Research and Schlumberger Technology Corp. are slated to receive up to $49 million in OCED funding to pilot TDA Research’s sorbent-based technology. The project received $5 million under the program in August 2024 to kick off Phase 1. The Dry Fork pilot project, located at the Wyoming Integrated Test Center near Basin Electric’s 405-MW Dry Fork Power Station, will capture over 90% of CO2 emissions from coal flue exhaust at high purity levels (+95%). The system aims to capture up to 158,000 metric tons of CO2 per year. Phase 1 activities, which will span 18 to 22 months, include a front-end engineering design (FEED) study, workforce planning, project permitting, and environmental reviews. The captured CO2 will be evaluated for sequestration options, including through Wyoming CarbonSAFE.

Distributed Power, Microgrids, and Clean Fuels Also Targeted

While not tied to utility-scale fossil generation, several terminated DOE projects represented investments in power infrastructure, including onsite generation, microgrid integration, and electrification of hard-to-abate sectors. All were aligned with broader decarbonization mandates under the Infrastructure Investment and Jobs Act (IIJA) and proposed near-term emissions reductions through system-level power solutions.

Kohler Co. ($51.2 million)—Casa Grande, Arizona. Awarded in October 2024, Kohler’s Vikrell Electric Boiler & Microgrid System project proposed to replace natural gas boilers with electrified thermal systems and integrate onsite renewables. The installation included 21 MW of solar PV and a 20.5-MW battery energy storage system, intended to power manufacturing operations and reduce carbon dioxide emissions by 7,865 metric tons per year. The project was designed as a replicable template for industrial electrification and behind-the-meter decarbonization.

Ørsted Star P2X LLC ($99 million)—Chambers County, Texas. This advanced Power-to-X demonstration—selected in March 2024—sought to build out the Star e-Methanol facility, which would convert renewable electricity and captured CO₂ into up to 300,000 metric tons of e-methanol per year. The project targeted decarbonization of the maritime and aviation sectors, while also leveraging grid infrastructure and industrial power integration along the Gulf Coast. It was considered one of the nation’s most ambitious clean fuels projects at the time of cancellation.

Nevada Gold Mines, LLC ($95 million)—Eureka County, Nevada. Announced in November 2024, this project aimed to deploy 100 MW of solar PV and 248 MWh of battery energy storage across multiple gold mining operations. The goal: to offset fossil fuel use in mining operations and cut 2 million metric tons of CO₂ emissions over the project’s lifetime. Developed by Barrick and Newmont, it represented one of the most significant clean power transitions in the domestic extractive sector, with lessons applicable to energy-intensive industries nationwide.

Industry Response to the Sudden Shift

The abrupt termination of the federal awards has prompted new uncertainty for the power sector, which is grasping for near-term, scalable solutions to decarbonize dispatchable generation as demand growth looms. The DOE has not released project-specific evaluations, nor has it said whether canceled projects will be reconsidered under revised rules.

The decision arrives as carbon capture and storage (CCS) was gaining momentum in the power sector. Proponents argue that CCS remains essential to any realistic decarbonization pathway, especially for dispatchable fossil assets. Experts have, however, acknowledged that even with advances in solvent efficiency and flexible operation, most projects still depend heavily on federal tax incentives like the 45Q credit, carbon pricing frameworks, or long-term offtake contracts to close financing.

However, the future of 45Q is now also uncertain. In March 2025, a bipartisan House bill—the 45Q Repeal Act, introduced by Representatives Scott Perry (R-PA) and Ro Khanna (D-CA)—proposed eliminating the credit entirely, citing $30 billion in projected savings. At the same time, other bipartisan proposals have emerged to expand or reform the credit, including efforts to increase the value to $120 per ton and adjust its inflation indexing. Meanwhile, the House-passed budget reconciliation bill preserves 45Q but phases out credit transferability, a move industry groups warn could stall financing and jeopardize the economics of dozens of carbon capture projects already in development. As the Senate prepares to weigh the future of the incentive, project developers are now facing shifting ground under what had long been considered the financial backbone of carbon capture in the U.S.

The regulatory uncertainty is a major upheaval for an industry that has long struggled to align high capital costs, solvent stability, and complex permitting for pipelines and storage. As of May 2025, only a handful of Class VI underground injection well permits—required for long-term CO₂ storage—have been issued by the Environmental Protection Agency (EPA), while more than 160 applications remain under review, many languishing well beyond the agency’s 24-month target. Although the EPA approved its first Class VI permits in Texas in April, the broader backlog has spurred a nationwide push for “state primacy,” allowing states to take over the permitting process. North Dakota, Wyoming, Louisiana, and most recently West Virginia have secured this authority, while Texas and Arizona are still navigating the approval process—prompting state officials and business leaders in Texas to press the EPA for swifter action.

For now, developers, utilities, and their partners are being forced to reassess. PPL Corp, which has been developing Cane Run 7, confirmed it had received formal notice of the award termination. “Together with our project partners, we will review our options for advancing this important research moving forward,” it said.

“Together with our research partners, PPL’s Kentucky utilities have spearheaded the research and development of carbon capture for 20 years and have developed industry-leading capabilities in this space,” a spokesperson told POWER. “While we are disappointed that the U.S. Department of Energy funding for this project has been terminated, we remain focused on driving innovation and important research and development in this space. And across PPL, we remain focused on advancing a safe, reliable, affordable and cleaner energy future, ensuring sufficient supply to meet rising electricity demand 24/7 and powering economic development in the communities we serve.”

The broader carbon management community is also sounding the alarm. Jessie Stolark, executive director of the Carbon Capture Coalition, a nonpartisan alliance of more than 100 companies, labor unions, and environmental groups, called the termination of 24 DOE-funded projects “a major step backward in the nationwide deployment of carbon management technologies.” In a statement to POWER, Stolark stressed that these were rigorously vetted projects “crucial to meeting America’s growing demand for affordable, reliable, and sustainable energy.” She warned that canceling them could undermine U.S. leadership in carbon management just as other countries accelerate their own frameworks: “Moves like this risk ceding America’s energy and technological leadership to other nations.” Above all, she added, “businesses require certainty to plan and execute projects, and carbon management is no different.”

—Sonal Patel is a POWER senior editor (@sonalcpatel, @POWERmagazine).