DOE Invests $1.2 Billion in Direct Air Capture Demonstrations

The U.S. Department of Energy (DOE) announced its plan to allocate up to $1.2 billion to invest in two commercial-scale direct air capture (DAC) facilities situated in Texas and Louisiana.

These projects, which are the first of their kind in the United States, mark the beginning of the Bipartisan Infrastructure Law-backed Regional Direct Air Capture Hubs program. This initiative aims to initiate a large-scale network of carbon removal facilities across the country.

The DOE announced that these efforts will remove nearly 2 million metric tons of carbon dioxide from the environment each year. This is the largest engineering carbon removal investment ever made, and each hub will eventually eliminate 250 times more carbon dioxide than the largest operational direct air capture system.

Direct air capture involves the process of isolating CO2 from the air, aiding in the reduction of pre-existing atmospheric CO2 levels. The separated CO2 can then be securely stored deep underground or transformed into carbon-containing products, such as concrete, to prevent its re-release into the atmosphere.

Project Cypress in Louisiana’s Calcasieu Parish is one of the selected projects. Through Gulf Coast Sequestration, a partnership between Battelle, Climeworks Corporation, and Heirloom Carbon Technologies, Inc. intends to safely capture and store over 1 million metric tons of CO2 from the atmosphere each year.

The second project, the South Texas Direct Air Capture Hub, located in Kleberg County, Texas, is led by 1PointFive, a subsidiary of Occidental, along with partners Carbon Engineering Ltd. and Worley. Their objective is to create and demonstrate a direct air capture facility capable of removing up to 1 million metric tons of CO2 annually, which will be stored in an associated saline geologic CO2 storage site.

In addition to these projects, DOE announced plans to introduce 19 new initiatives for award negotiations, supporting early stages of project development such as feasibility assessments and front-end engineering and design (FEED) studies. Fourteen of these initiatives will investigate the viability of potential direct air capture hub locations, ownership structures, and business models. The remaining five will focus on FEED studies, establishing technical requirements to mitigate risk in later project phases.

The DOE plans to issue additional funding opportunities over the upcoming years to fully execute the Congressional mandate for the Regional DAC Hubs.

The Department Of Energy also announced its intention to release a series of funding opportunities and prizes aimed at supporting the development and commercialization of various carbon dioxide removal technologies. These efforts align with the Carbon Negative Shot, part of the broader Energy Earthshots Initiative, which seeks to drive innovation in the carbon dioxide removal industry and establish the U.S. as a leader in this field.

The Energy Earthshots Initiative’s goal is to achieve the removal and meaningful storage of CO2 from the atmosphere for under $100 per net metric ton of CO2 equivalent within the next decade.

The Regional DAC Hubs Program managed in collaboration between the DOE Office of Clean Energy Demonstrations and the DOE Office of Fossil Energy and Carbon Management, will oversee project management for the direct air capture Hubs. This includes demonstrating the processes of capture, processing, delivery, storage, or end-use of captured carbon, alongside community benefit plans and environmental safety measures.