DOGE cuts federal money for upgrades at Velveeta plant in New Ulm

A green energy project at a Kraft cheese plant in Minnesota has lost its federal backing.

Last year, the Department of Energy pledged $170 million to help Kraft Heinz decarbonize 10 plants around the country, including the New Ulm plant that makes Velveeta and Cheez Whiz. But Elon Musk’s Department of Government Efficiency (DOGE) this spring recommended scrapping the grant as part of $3.6 billion in energy cuts.

“The Trump administration is doing our due diligence to ensure we are utilizing taxpayer dollars to strengthen our national security, bolster affordable, reliable energy sources and advance projects that generate the highest possible return on investment,” Energy Secretary Chris Wright, a former oil industry executive, said in a news release.

The New Ulm plant was in line to receive $3 million in federal funds for energy-efficiency upgrades that would have reduced carbon emissions by 99%.

Kraft Heinz, based in Chicago and Pittsburgh, declined to answer questions about the New Ulm project specifically but said the pulled funding doesn’t change the food company’s intention ”to continue investing” in its 30 U.S. manufacturing facilities.

“Over the next approximately five years, we plan to invest $3 billion to modernize our U.S. supply chain infrastructure,” the company said in a statement Thursday. “We will continue to drive energy-efficiency projects forward as we make these investments.”

Kraft Heinz, like many companies, has pledged to be carbon-neutral by 2050 by reducing and/or offsetting its emissions. There is broad consensus among scientists that human-caused carbon emissions are altering the planet’s climate and its long-term ability to sustain life in its current form.

Kraft expected the energy-efficiency projects to wrap up by 2030; it was unclear whether any work had started in New Ulm.

Advocates for the federal funding said it was worth more than just energy savings.

“This program could have been a centerpiece of achieving the administration’s goal to bring manufacturing back to the United States,” Steven Nadel, executive director of the American Council for an Energy-Efficient Economy, said in a statement. “Choosing to cancel these awards is shortsighted.”