The announcement coincided with a separate decision by the Trump administration to freeze $18 billion in federal support for two large infrastructure projects in New York City, the home state of the current leaders of both Democratic caucuses on Capitol Hill.
Projects and regions affected
Although the DOE did not publish a comprehensive list, Democratic members of the House Appropriations Committee compiled and released details of the terminated grants. Among the largest was $1.12 billion for the Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES), a hydrogen hub planned for California. ARCHES chief executive Angelina Galiteva said the withdrawal ignores the initiative’s potential to create 220,000 jobs and strengthen national energy security.
Washington state lost about $1.1 billion in grants, including funding for the Pacific Northwest Hydrogen Hub. Governor Bob Ferguson called the move “outrageous,” claiming it punishes states that traditionally vote Democratic. Chris Green, president of the Pacific Hydrogen Association, said private partners had committed roughly 80 percent of the hub’s projected costs, with federal dollars covering the remainder. “We now have to determine whether the project is feasible without that 20 percent,” he told reporters.
Smaller but still significant awards were also halted. One example is an $87 million grant to Sublime Systems for the construction of a low-carbon cement plant in Holyoke, Massachusetts. Ian Wells, senior advocate at the Natural Resources Defense Council, argued that the facility would have reduced emissions and added up to 90 manufacturing jobs. “It was potentially a win-win for competitiveness, employment, and the environment,” Wells said.
Political and economic reactions
Senate Minority Leader Chuck Schumer labeled the decision “a wrecking ball to working families’ lives,” contending that it will eliminate construction jobs and increase household energy costs. House Democrats on the Appropriations Committee issued a statement warning that the cancellations would raise prices, cut employment, and undermine grid reliability.
For industry groups, the immediate concern is uncertainty. The Pacific Hydrogen Association, the California hydrogen consortium, and multiple clean-tech firms are reassessing project timelines and financing structures. Some executives cautioned that private investors may hesitate to fund early-stage decarbonization technologies if federal backing can be withdrawn at short notice.
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The DOE maintains that the terminations align with fiscal stewardship principles. In a public note, the department said each award underwent an individualized financial review that considered cost, schedule, and projected benefits.
What comes next
Local and state officials are exploring legal and legislative responses. Washington’s governor confirmed that his office is working with the state attorney general to challenge the federal action. California lawmakers are similarly evaluating options to replace or restore funding for the ARCHES hub.
Industry analysts say the broader impact will depend on how swiftly affected projects can secure alternate financing or reconfigure their scopes. While some initiatives may proceed with reduced budgets, others—particularly those still in planning phases—face higher risks of delay or cancellation.
As the government shutdown continues, additional reviews of federal spending are possible. Clean-energy advocates argue that prolonged uncertainty could slow the nation’s progress toward emissions targets and deter private capital from emerging technologies.
For ongoing updates on federal funding shifts and their market implications, visit our dedicated Finance News Update section.
Image credit: Reuters
