U.S. Energy Department to Spend $3.7 Billion on Carbon Removal

December 14, 2022

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by Liz Hampton (Reuters) The U.S. Department of Energy on Tuesday agreed to commit $3.7 billion to finance projects to remove planet-warming carbon from the atmosphere and meet the nation's goal of net-zero greenhouse gas emissions by 2050.

Tuesday's announcement formalizes a previously announced plan to finance four direct air capture hubs to draw carbon dioxide (CO2) from the air and store it underground.

The agency also outlined programs to bolster research on carbon removal technology and fund grants to state and local governments and utilities for carbon utilization. The initiatives are funded by the Bipartisan Infrastructure Law.

"We must tackle the legacy pollution already in our atmosphere to avoid the worst effects of climate change,” said U.S. Secretary of Energy Jennifer Granholm.

The Department of Energy estimates that initiatives taken through the Inflation Reduction Act (IRA) and Bipartisan Infrastructure Law will by 2030 push economy-wide greenhouse gas emissions 40% below 2005 levels.

The proposed direct air-capture hubs will yank at least 1 million tonnes of carbon from the atmosphere annually, for storage underground or conversion into products. Applications for the hubs are due early next year, and it will likely be at least two years before they are in operation, the Department of Energy said.

Dozens of U.S. carbon capture projects have been proposed to take advantage of Federal 45Q tax credits provided by the IRA. Direct air-capture projects receive a per-tonne credit of $180 versus $50 previously.

Removing carbon directly from the air is more expensive than from manufacturing or utility sources, such as ethanol plants. No large-scale direct air-capture projects are operational in the United States, though some projects are underway. READ MORE

DOE releases record funding for removing carbon (E&E News Climatewire)

Sucking carbon from the air reaps $3.5B (Politico)

Biden-Harris Administration Announces $3.7 Billion to Kick-Start America’s Carbon Dioxide Removal Industry (U.S. Department of Energy)

A breakdown of the DAC hubs funding opportunity announcement -- The need-to-know on DOE’s recent guidance (Carbon 180)

Spending bill signals growing support for carbon removal -- For the first time, appropriators call for the federal government to purchase CO2 pulled from the atmosphere or oceans. (Politico)

There Are Fortunes to Be Made in the Carbon Capture Gold Rush -- Tax incentives in the IRA have set oil majors and manufacturers rushing to break ground on new projects. (Bloomberg)

Biden Administration Announces $3.7B for CO2 Removal Industry (Carbon Capture Magazine)

DOE Announces up to $20M to Accelerate Carbon Management (U.S. Department of Energy/Carbon Capture Magazine)

Excerpt from U.S. Department of Energy: The President’s historic agenda is working to lower carbon pollution across all sectors of our economy. As we continue to lower carbon emissions even further, carbon dioxide removal is a critical tool for cleaning up legacy carbon pollution that is already causing significant climate change related damage in the form of more intense storms, floods, and wildfires.

In addition to this funding through the Bipartisan Infrastructure Law, President Biden’s Inflation Reduction Act features substantial improvements to the federal Section 45Q tax credit for the capture and geologic storage of CO2, which will provide substantial complementary incentives. DOE’s analysis estimates that actions taken through the Inflation Reduction Act and the Bipartisan Infrastructure Law will drive 2030 economy-wide greenhouse gas emissions to 40% below 2005 levels.

DOE’s efforts will result in benefits to communities across the United States like creating quality jobs, while ensuring projects prioritize equity and environmental justice in alignment with President Biden’s Justice40 Initiative, which aims to provide 40 percent of the overall benefits of certain federal investments to disadvantaged communities. In addition to reducing greenhouse gas emissions, these technologies can reduce criteria air pollutants, protect communities from increases in cumulative pollution, and maintain and create good, union-friendly jobs across the country.

Today, DOE is announcing new efforts from the following Bipartisan Infrastructure Law:

Direct Air Capture Commercial and Pre-Commercial Prize – DOE’s Office of Fossil Energy and Carbon Management (FECM) is announcing the Direct Air Capture Prize for support and prize 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. Read the full Direct Air Capture Prize Competitions announcement here.
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 under this program released today 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. Read the full funding opportunity announcement here.
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 released today informs stakeholders of DOE’s intent to announce the first FOA issuance, which will provide grants totaling up to $100 million. Read the Notice of Intent here.
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. Visit OTT’s TCF Lab Call webpage here.

DOE’s Commitment to Carbon Capture Innovation

The Bipartisan Infrastructure Law programs support the goals of DOE’s Carbon Negative Shot initiative, which calls for innovation in carbon dioxide removal pathways that will capture CO2 from the atmosphere and store it at gigaton scales for less than $100/net metric ton of CO2-equivalent. They also contribute to U.S. responsibilities under the Carbon Dioxide Removal Launchpad, a coalition of countries that has committed to leveraging collective resources and best practices to accelerate innovation and cost reductions across a portfolio of carbon dioxide removal technologies. The Carbon Dioxide Removal Launchpad members each agree 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 robust measurement, reporting, and verification.

Since January 2021, DOE 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.

Visit the OCED, FECM, and OTT websites for more information on how DOE is working to expand the commercial impact of its research investments to accelerate the deployment of carbon management technologies and support an equitable transition to a decarbonized energy system. READ MORE

Excerpt from U.S. Department of Energy/Carbon Capture Magazine: The U.S. Department of Energy’s (DOE) Office of Fossil Energy and Carbon Management (FECM) on December 12th announced $20 million in funding for projects that will improve stakeholder access to region-specific information and technical assistance regarding the commercial deployment of carbon capture, transport, conversion, and storage technologies across the United States. These technologies work together to capture carbon dioxide (CO2) emissions from power and industrial facilities, then transport the CO2 for permanent geologic storage or conversion to valuable long-lived products like concrete to reduce negative climate impacts. Large-scale deployment of carbon management technologies is crucial to meeting President Biden’s goal of achieving net-zero greenhouse gas emissions by 2050.

“As we continue to ramp up our investments to decarbonize the nation’s most energy and emissions intensive sectors like power generation and heavy industry, we are also conducting meaningful engagement with local communities and stakeholders that may be impacted by these investments,” said Brad Crabtree, Assistant Secretary of Fossil Energy and Carbon Management. “The funding announced today will support that engagement by establishing an effective mechanism for developing and providing technical assistance specific to regions where large-scale carbon management hubs are expected to emerge.”

FECM currently supports four regional projects that have already provided technical assistance on secure geologic carbon storage throughout the United States. Today’s funding opportunity announcement (FOA) will augment these existing efforts by developing new technical assistance and public engagement projects with a more local geographic focus. The projects will provide stakeholders with crucial resources and information necessary to facilitate the regional deployment of large-scale geologic storage facilities or carbon management hubs that could store up to hundreds of millions of metric tons of CO2 at an injection rate of more than 5 million metric tons per year. The FOA also provides the opportunity for DOE to work with State Geologic Surveys and related organizations with unique technical capabilities to identify the potential for these large-scale projects within promising geologic basins in their respective states.

Read more details of this FOA here, and visit our website to find resources and recommendations for project teams, project evaluators, and communities on how to include equity and justice and conduct engagement in project plans. All questions about this FOA must be submitted through FedConnect; register here for an account.

FECM funds research, development, demonstration, and deployment projects to decarbonize power generation and industrial sources, remove carbon dioxide from the atmosphere, and mitigate the environmental impacts of fossil fuel production and use. Priority areas of technology work include carbon capture, carbon conversion, carbon dioxide removal, carbon dioxide transport and storage, hydrogen production with carbon management, methane emissions reduction, and critical minerals production. To learn more, visit the FECM website, sign up for FECM news announcements, and visit the NETL website. READ MORE