DOE Announces Up to $1.2 Billion for Direct Air Capture Demonstrations

by Paul Ciampoli
APPA News Director
August 12, 2023

The U.S. Department of Energy on Aug. 11 announced up to $1.2 billion to advance the development of two commercial-scale direct air capture facilities in Texas and Louisiana.

The projects — the first of this scale in the United States — represent the initial selections from the Bipartisan Infrastructure Law-funded Regional Direct Air Capture Hubs program, which aims to kickstart a nationwide network of large-scale carbon removal sites.

Together, the projects are expected to remove more than 2 million metric tons of carbon dioxide emissions each year from the atmosphere, DOE said.

The announcement will be the world’s largest investment in engineered carbon removal in history and each hub will eventually remove more than 250 times more carbon dioxide than the largest direct air capture facility currently operating, according to DOE.

Direct air capture is a process that separates CO2 from the air, helping to reduce legacy CO2 in the atmosphere. The separated CO2 can then be safely and permanently stored deep underground or converted into carbon-containing products like concrete that prevent its release back into the atmosphere,

Selected projects include Project Cypress (Calcasieu Parish, LA). Battelle, in coordination with Climeworks Corporation and Heirloom Carbon Technologies, Inc., aims to capture more than 1 million metric tons of existing CO2 from the atmosphere each year and store it permanently deep underground.

This hub intends to rely on Gulf Coast Sequestration for offtake and geologic storage of captured atmospheric CO2.

The second project is the South Texas direct air capture Hub (Kleberg County, TX). 

1PointFive, a subsidiary of Occidental, and its partners, Carbon Engineering Ltd. and Worley, seek to develop and demonstrate a direct air capture facility designed to remove up to 1 million metric tons of CO2 annually with an associated saline geologic CO2 storage site.

Learn more about the two Regional direct air capture Hubs projects selected for award negotiations here.

Potential Future DAC Hub Studies

To assess the viability of future direct air capture Hub demonstrations, DOE also announced 19 additional projects selected for award negotiations that will support earlier stages of project development, including feasibility assessments and front-end engineering and design (FEED) studies.

Fourteen projects will enable early-stage efforts to explore the feasibility of a potential direct air capture Hub location, ownership structure, and business model. Five projects will perform FEED studies that establish and define technical requirements focused on project scope, schedule, and costs to reduce risk during later project phases. Learn more about these 19 projects selected for award negotiations here.

DOE intends to issue additional funding opportunity announcement in the coming years to fully implement the Regional DAC Hubs mandate from Congress.

Selection for award negotiations is not a commitment by DOE to issue an award or provide funding. Before funding is issued, DOE and the applicants will undergo a negotiation process, and DOE may cancel negotiations and rescind the selection for any reason during that time.

Carbon Negative Shot Pilots

DOE also announced its intent to publish a series of funding opportunities for projects and prizes focused on supporting the development and commercialization of a suite of carbon dioxide removal technologies.

These efforts will collectively support the Carbon Negative Shot, part of DOE’s larger Energy Earthshots Initiative and the U.S. government’s first major effort to help spur innovation and position U.S. enterprises as leaders in research, manufacturing, and deployment in the carbon dioxide removal industry.

The Earthshot sets a goal to remove CO2 from the atmosphere and store it at meaningful scales for less than $100 per net metric ton of CO2-equivalent within the decade. Read the full NOI.

The DOE Office of Clean Energy Demonstrations, in collaboration with the DOE Office of Fossil Energy and Carbon Management, manages the Regional DAC Hubs Program and will provide project management oversight for the direct air capture Hubs projects selected to demonstrate the capture, processing, delivery, and storage or end-use of captured carbon as well as community benefit plans and environmental safety.