Local steel producer Cleveland-Cliffs has officially canceled its hydrogen-powered steel project in Middletown, Ohio.

The company claims the decision was made due to concerns about not having enough clean hydrogen supply. The move also comes on the heels of the repeal of the Inflation Reduction Act which was going to fund the project.

CEO Lourenco Goncalves said even with the grant, the company would need to invest an extra $1.1 billion, making the total project cost $1.6 billion.

The project would have involved replacing coal-reliant blast furnaces with hydrogen-ready direct-reduced iron plants and electric melting furnaces.

The planned switch from a coal-based steel plant to hydrogen was expected to create 1,200 union construction jobs and protect 2,500 existing positions.

Instead Cleveland-Cliffs will focus on extending the life of its existing coal-fired blast furnace.