For the hundreds of projects whose awards were canceled by the Department of Energy last year, there doesn’t seem to be one clear path forward. Some are backing out of their awards voluntarily, and seeking alternative funding. Others are being represented in one of two major lawsuits challenging cancellations.
Many are still moving through DOE’s internal appeals process. But not all companies have the time and money to hold out until that process is resolved.
Sublime Systems, a green cement startup that was counting on an $87 million grant to scale its electrochemical manufacturing approach, was among the first tranche of awards canceled by DOE in late May of last year. The company then disputed the termination through an internal DOE process.
Nearly 10 months later, however, there has been very little movement on the process. Last week Sublime confirmed it had laid off two-thirds of its workforce, attributing its financial struggles to the loss of its federal grant. The writing was on the wall; last December, Sublime announced that it was pausing construction on the Massachusetts manufacturing plant that the grant would have funded, which was set to open later this year.
The appeals process radio silence from DOE appears to be widespread, and isn’t isolated to Sublime, according to several conversations that Latitude Media has had with applicants on background. It may be thanks in large part to the mass layoffs that swept through the agency last year; DOE simply doesn’t have the staff necessary to handle the scale of appeals.
But other projects whose awards were terminated are finding clarity faster via the federal court system. In January, a federal judge in Washington, D.C. ordered DOE to reinstate nearly $28 million in grants that were terminated in October, finding the administration violated the Fifth Amendment by targeting recipients based on their geographic location. Those seven awards, Latitude Media has learned, have officially been reinstated, and at the end of January recipients received notices of their change in status from DOE.
The reinstatement of those awards is something that other impacted projects should be paying close attention to, one former DOE official told Latitude Media, particularly in light of the Sublime news.
“If you were one of the other awardees that was terminated on October 1, you should be looking not only at the judge’s ruling, but the Department’s response…and try to follow that same exact playbook,” they said.
The agency’s internal process requires awardees to file a complaint and go through an informal resolution process first; if that process fails to resolve the dispute, then a formal appeal can be made to the Office of Hearings and Appeals, and the final decision can eventually be appealed to federal court. But for awards that were terminated in October, “it’s been five months and nothing has happened,” the former official said.
Meanwhile, the federal lawsuit led by the City of St. Paul was filed in mid-November, and reached a clear outcome in less than 90 days. “If you’re looking for a more clear path from A to B, it was just laid out for you by these seven plaintiffs,” they added.
Working with the new DOE
For the awardees represented in the lawsuit, it’s time to move quickly to get bills paid and projects built so they can ultimately use the funding for reimbursement.
One recipient, who spoke with Latitude on condition of anonymity, said they’ve resumed regular meetings with their DOE program manager — who, incidentally, found out about the award termination from the recipients themselves. For some, the now-compressed timelines may be tricky given that projects rely on multiple partners and contractors, some of whom may now be wary of engaging with DOE, or else have moved on to other projects that they could actually get paid for, the recipient said.
Another key change for the resuscitated awards is in the reporting process under the Trump administration. Previously, award recipients had to update DOE regularly on their impact on disadvantaged communities. Now, the community benefits requirements are no more.
The awardee said they are hopeful that the outcome in the lawsuit will inform the DOE dispute process, but for organizations that have broad engagements with the agency, figuring out how to navigate that process without jeopardizing their other DOE work is “always back of mind.”
The state of industrial decarbonization funding
Most of the projects represented in the lawsuit were managed by the Office of Energy Efficiency and Renewable Energy, which was cut in the agency’s reorganization in November. But Sublime was one of 24 awards managed by the now-defunct Office of Clean Energy Demonstrations that the administration canceled last spring.
Most of those awards, including Sublime’s, stemmed from the Industrial Demonstrations Program, a $6.3 billion initiative to deploy decarbonization solutions for heavy industry, including iron and steel, cement and concrete, chemicals and refining, and others. As part of that cost-sharing program, private industry committed around $14 billion, making the federal share around 30%.
Those projects began award negotiations with DOE in March 2024, well before the presidential election. Now, despite the significant setback, Sublime is still hoping it can eventually get back on track: “The company remains engaged in dialogue with the Department of Energy to restore our award, and resume construction of Sublime’s first commercial plant,” Sublime said in an emailed statement.
But while some OCED awardees were larger, more established industrial companies seeking to add additional business lines or upgrade their manufacturing, Sublime was a fairly young startup, still in the process of raising funds and building its revenue streams outside of the research and development environment. While companies with a strong existing customer base may be able to wait out the appeals process with DOE, earlier-stage companies don’t have deep enough pockets to be in limbo for so long.
DOE didn’t respond to Latitude Media’s request for comment on the status of Sublime’s appeal.
