Emissions

DOE aims billions at building a carbon dioxide removal industry

Most of the new funding will go to develop four regional direct air capture hubs to demonstrate a direct air capture technology at commercial scale.

The Department of Energy launched four programs seeded with $3.7 billion in infrastructure funding aimed at helping to build a commercially viable carbon dioxide removal industry. 

The programs are intended to help accelerate private-sector investment, spur advancements in monitoring and reporting practices for carbon management technologies, and provide grants to state and local governments to procure and use products developed from captured carbon emissions. 

In addition to this funding through the 2021 Bipartisan Infrastructure Law, the Inflation Reduction Act features improvements to the federal Section 45Q tax credit for the capture and geologic storage of CO2, which are intended to provide complementary incentives.

The new efforts include: 

Direct Air Capture Commercial and Pre-Commercial Prize – DOE’s Office of Fossil Energy and Carbon Management (FECM) announced the Direct Air Capture Prize for awards totaling $115 million to promote diverse approaches to direct air capture. The Direct Air Capture Pre-Commercial Prize provides up to $15 million in prizes to incubate and accelerate research and development of breakthrough direct air capture technologies. The Direct Air Capture Commercial Prize provides up to $100 million in prizes to qualified direct air capture facilities for capturing CO2 from the atmosphere. 

Regional Direct Air Capture Hubs – DOE’s Office of Clean Energy Demonstrations (OCED), in partnership with FECM, is announcing the Regional Direct Air Capture Hubs program. DOE will invest $3.5 billion to develop four domestic regional direct air capture hubs, each of which will demonstrate a direct air capture technology or suite of technologies at commercial scale with the potential for capturing at least 1 million metric tons of CO2 annually from the atmosphere and storing that CO2 permanently in a geologic formation or through its conversion into products. The first funding opportunity announcement makes available more than $1.2 billion to begin the process for conceptualizing, designing, planning, constructing, and operating direct air capture hubs, with additional opportunities expected to follow in the coming years. 

Carbon Utilization Procurement Grants – FECM will manage the Carbon Utilization Procurement Grants Program, which will provide grants to states, local governments, and public utilities to support the commercialization of technologies that reduce carbon emissions while also procuring and using commercial or industrial products developed from captured carbon emissions. The Notice of Intent informs stakeholders of DOE’s intent to announce the first FOA issuance, which will provide grants totaling up to $100 million. 

Bipartisan Infrastructure Law Technology Commercialization Fund (TCF) -– DOE’s Office of Technology Transitions (OTT), in partnership with FECM, will issue a Lab Call to accelerate commercialization of carbon dioxide removal technologies, including direct air capture, by advancing measurement, reporting, and verification best practices and capabilities. OTT anticipates awarding $15 million to projects led by DOE National Laboratories, plants, and sites, and supported by diverse industry partnerships spanning the emerging carbon dioxide removal sector. 

DOE said the 2021 Bipartisan Infrastructure Law programs support the goals of its Carbon Negative Shot initiative, which calls for innovation in carbon dioxide removal to capture CO2 from the atmosphere and store it at gigaton scales for less than $100/net metric ton of CO2-equivalent. Carbon Dioxide Removal Launchpad members each sign on to build at least one 1,000+ ton/year carbon dioxide removal project by 2025, contribute to cumulative investment of $100 million collectively by 2025 to support demonstration projects, and support efforts to advance measurement, reporting, and verification. 

The federal agency said that since January 2021, it has invested more than $250 million in 62 research and development projects and front-end engineering design studies to advance carbon management approaches that include carbon dioxide removal and carbon utilization projects. 

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