The loan will help Wabash Valley Resources finance its $2.6bn project in West Terre Haute, reviving a coal gasification facility idled since 2016 to produce 500,000 tonnes of anhydrous ammonia per year through a process equipped with carbon capture technology.

Wabash plans to use coal from a nearby mine and petcoke as a feedstock, which will be reacted with oxygen and steam at high temperatures to produce syngas – a combination of hydrogen and carbon monoxide.

This will be put through a water-gas shift reaction to increase hydrogen yield while generating carbon dioxide.

While the hydrogen will be combined with nitrogen to make ammonia fertilisers, Wabash plans to equip the plant with carbon capture and storage technology to remove the 1.65 million tonnes of annual CO2 emissions.

Wabash has not revealed where the CO2 will be stored but claims the project will serve as a “model” for creating fertiliser in a “low-carbon process”.

Many environmental groups have criticised such pathways for extending coal use.

The DOE, while failing to mention the carbon capture element of the project, said it would help reduce import dependence for ammonia fertilisers and support US coal, workers, and farmers.

The move aligns with recent efforts by the Trump administration to bolster domestic coal production through new leasing opportunities and subsidies, despite concerns it could undermine clean air and climate goals.