A high-stakes race that will shape the future of direct air capture technology has officially begun.
The Department of Energy fired the starting gun Tuesday with the release of guidelines the agency will follow when awarding $3.5 billion for four regional hubs that aim to rapidly scale up systems for removing carbon dioxide from the atmosphere. That prize money, which comes from the bipartisan infrastructure law of 2021, will be distributed over the next five years in two prize competitions.
The infusion of cash comes as the direct air capture industry, or DAC, is still in its infancy. There are only 18 operating facilities worldwide that use fans, filters and pipes to suck carbon out of the air and pump it underground, where it’s supposed to be stored indefinitely. They are collectively capable of capturing less than 10,000 metric tons of CO2 per year, according to an April report from the International Energy Agency.
“No matter how fast we decarbonize the nation’s economy, we must tackle the legacy pollution already in our atmosphere to avoid the worst effects of climate change,” Energy Secretary Jennifer Granholm said Tuesday in a press release.
The funding windfall is likely to bolster growing interest among corporations and startups who see the promise of sucking emissions out of the sky, sometimes for large fees. This year, companies like Occidental Petroleum Corp., Carbon Capture Inc. and Frontier Carbon Solutions have announced plans for major DAC projects in Texas and Wyoming (Energywire, Sept. 9).
DOE’s announcement Tuesday could lead to an expansion of the industry, which many climate scientists say will be essential to limit global warming to 1.5 degrees Celsius—the international target established by the Paris Agreement.
The agency will begin by offering up to $1.2 billion to support credible DAC hub plans that could capture at least 1 million metric tons of CO2 annually, either from a single facility or interconnected units. Two of the hubs need to be in what the law described as “economically distressed communities in the regions of the United States with high levels of coal, oil, or natural gas resources.”
“These DAC hubs are a really big deal,” said Erin Burns, the executive director of the CO2 removal advocacy group Carbon180. “It’s going to have really an outsized impact on what the global DAC industry looks like.”
Each applicant could win matching funds ranging from $3 million for the earliest-stage efforts to $500 million for shovel-ready proposals. Companies, states or other groups interested in competing for the …….