US Energy Department Cancels $7.6 Billion in Funding Meant for Projects

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(Reuters) – The U.S. Department of Energy on Wednesday said it planned to cancel $7.56 billion in financing for hundreds of energy projects that it said would not provide sufficient returns to taxpayers.

The department’s announcement came hours after White House budget director Russell Vought said in a post on X that the administration would terminate nearly $8 billion in climate-related funding in 16 Democratic-led states, including California and New York.

The move was part of a broader, $26 billion funding freeze that was unveiled on Wednesday as President Donald Trump followed through on a threat to use the federal government shutdown to target Democratic priorities.

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In a statement issued late on Wednesday, the DOE said it would cancel 321 financial awards supporting 223 projects. It did not list the projects, but said the grants had been issued by six agency offices responsible for clean energy, efficiency, grid deployment, advanced research, manufacturing and fossil fuels.

“President Trump promised to protect taxpayer dollars and expand America’s supply of affordable, reliable, and secure energy,” Energy Secretary Chris Wright said in a statement. “Today’s cancellations deliver on that commitment. Rest assured, the Energy Department will continue reviewing awards to ensure that every dollar works for the American people.”

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Earlier, Bloomberg reported that the planned cancellations included funding for proposed hydrogen hubs in California and the Pacific Northwest.

California Governor Gavin Newsom, a Democrat, criticized the administration for canceling its $1.2 billion commitment to fund his state’s hydrogen hub.

“We’ll continue to pursue an all-of-the-above clean energy strategy that powers our future and cleans the air, no matter what DC tries to dictate,” Newsom said in a statement.

Reporting by Jasper Ward, Nichola Groom and Tim Gardner; Editing by Chris Reese and Thomas Derpinghaus.