New DOE Program Seeks To Clean Up US Coal Mines

In early April, the US Department of Energy (DOE) launched the ‘Clean Energy Demonstration Program on Current and Former Mine Land’, securing $500 million to fund clean energy projects on mine land until 2026. The initiative will finance up to 50% of project costs between $10 million and $150 million, seeking to tackle the environmental and social impacts of the declining coal mining industry.

With annual production falling by more than 50% between 2009 and 2020, coal mining in the US has been in steady decline for over a decade. At face value, this may seem a step in the right direction for reaching national environmental goals, but simply stopping production is not the end of the road. Abandoned mines continue to leak pollutants, and currently constitute the fifth largest source of methane emissions in the US. Methane’s global warming potential is 84 times greater than that of carbon dioxide over a 20-year period and its currently the second most abundant GHG by atmospheric composition. The development of clean energy projects under the DOE’s program has the potential to substantially reduce the quantity of methane emissions leaking from in-use and abandoned coal mines, while also accelerating production of renewable energy by up to 70% and generating more than $1 billion of investment in currently deprived areas.

This funding comes as part of a wave of initiatives to promote the growth of the US green economy, following the Bipartisan Infrastructure Law and the Inflation Reduction Act in 2022. With the potential to reinvigorate mining counties environmentally, socially and economically, it should incentivize the coal industry to transform or transfer assets before they become stranded by policy and poor profitability. Firms can capitalize on this funding lifeline to either develop sites internally as part of their energy transition or promote the purchase of assets by renewable project developers and investors.

Alastair Foyn

Alastair is an Analyst in the Verdantix Net Zero and Climate Risk practice. His current research agenda focuses on climate risk management software and carbon markets. Prior to joining Verdantix, Alastair worked at Tyler Grange Ltd where he gained experience in consultancy practices and environmental strategy. Alastair holds a First Class BSc in Biological Sciences from Durham University as well as an MSc in Sustainable Development from the University of St Andrews.