HOLYOKE — Recent cancellation of an $87 million federal grant to support construction of a low-carbon cement startup’s manufacturing plant in Holyoke is not expected to derail plans that would have that facility open by 2028, though the company is reviewing backup options.

While Sublime Systems, which is based in Somerville and was founded in 2020 at the Massachusetts Institute of Technology by Leah Ellis and Yet-Ming Chiang, is losing the federal support, a representative for the company, along with private investors, said the proposal to create a plant where up to 30,000 tons of cement per year are produced, and the company’s mission, are in line with the Trump administration’s preference for home-grown products.

“We were certainly surprised and disappointed about this development and we’re paying very close attention to this,” said Sublime Systems Senior Vice President of Business Development Joe Hicken. “We don’t think that the conversation is over.”

Hicken indicated the $150 million project remains on track, but added, “We’re a resilient company that hasn’t gotten this far without very rigorous scenario planning.”

Still, the company has seen investments from venture capital including Suffolk Technologies of Boston, which is also pre-purchasing some of the concrete that will be made in Holyoke. Additionally, Microsoft announced on May 22 that it would buy up to 623,000 tons of cement products from Sublime Systems’ first commercial factory over six to nine years, and several large contractors, with $60 billion in annual revenues, would be part of a Distribution Channel Partner program.

“The best businesses listen and respond to the demands of their customers, and that’s exactly what these GCs are doing,” Ellis said in a statement.

On May 30, Secretary of Energy Chris Wright rescinded 24 grants totaling $3.7 billion in awards issued by the Office of Clean Energy Demonstrations. The money for Sublime Systems had come as part of $6 billion from the Bipartisan Infrastructure Law and Inflation Reduction Act.

Sublime Systems in January 2024 signed a lease-to-own agreement for a 16-acre former industrial property on Water Street in Holyoke and expected the project would provide at least 70 jobs at the manufacturing plant when it opened. The company, offering a fossil-fuel-free, low-carbon alternative to traditional cement, is already running a pilot plant in Somerville that produces up to 250 metric tons of cement yearly.

Aaron Vega, director of the Holyoke’s Office of Planning and Economic Development, said even though city officials are disappointed in the federal decision, the likelihood that the plant is still coming jibes with the information city officials have received.

“All our meetings with the Sublime team indicate this project is moving forward,” Vega wrote in an email. “We do not yet have site plans submitted for review, but the city has had pre-application meetings with their design team and are working through the issues and opportunities at their location.”

In stripping the money, Wright cited that awardees failed to advance the energy needs of the American people, were not economically viable and would not generate a positive return on investment of taxpayer dollars. In addition, 16 of the 24 projects had been signed between Election Day last November and Inauguration Day in January.

“While the previous administration failed to conduct a thorough financial review before signing away billions of taxpayer dollars, 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,” Wright said in a statement. “Today, we are acting in the best interest of the American people by canceling these 24 awards.”

U.S. Rep. Richard Neal, though, blasted the decision as being harmful to the well-being of Holyoke and to the United States.

“The Trump administration’s decision to kill critical clean energy projects is deeply irresponsible and is a betrayal of American innovation, workers and the fight against climate change,” Neal said. “Scrapping funding for projects for innovators like Sublime Systems in Holyoke undercuts years of progress in decarbonizing heavy industry, and it jeopardizes good-paying jobs and economic development in communities that need it most.”

Neal pointed to the legislation he helped author: “The Inflation Reduction Act was written in the Ways and Means Committee during my time as chairman, representing the largest investment in combating climate change in our nation’s history. I can say unequivocally that this was not the intention of the bill; it was designed to accelerate the clean energy transition through innovation, not stall it,” Neal said.

Sublime Systems’ project is still expected to qualify for so-called 48C credit, or Qualifying Advanced Energy Project Tax Credit Program, that was established by the American Recovery and Reinvestment Act of 2009 and expanded under the Inflation Reduction Act.

“This isn’t just about climate — it’s about global competitiveness and leadership,” Neal said. “Turning away from American-made clean technologies in favor of outdated fossil fuel priorities is shortsighted and will be disastrous for our economy and environment, all while giving the upper hand to our competitors around the world. I urge the Trump administration to reverse course and recommit to a forward-looking energy strategy that supports innovators and benefits our communities, economy and planet.”

Suffolk Technologies issued its own statement in May in support of Sublime Systems.

“This is more than an investment; it’s a statement about the future of construction,” Jit Kee Chin, co-founder and managing partner at Suffolk Technologies, said in a statement. “Sublime’s mission is no less than fundamentally reshaping a cornerstone of the global built environment landscape, and we are proud to support them through our capital, our network and our commitment to building a more sustainable world.”

Material from the State House News Service was used in this report. Scott Merzbach can be reached at smerzbach@gazettenet.com.