The US Department of Energy appears poised to terminate funding for a pair of large carbon-sucking factories that were originally set to receive more than $1 billion in government grants, according to a department-issued list of projects obtained by MIT Technology Review and circulating among federal agencies.
One of the projects is the South Texas Direct Air Capture Hub, a facility that Occidental Petroleum’s 1PointFive subsidiary planned to develop in Kleberg County, Texas. The other is Project Cypress in Louisiana, a collaboration between Battelle, Climeworks, and Heirloom.
The list notes that around $50 million has been terminated for both projects, the initial tranche of federal funding for the developments. Each could have received about $500 million as the projects proceeded, according to the DOE announcement in 2023.
It’s not immediately clear if the termination of the initial grants means the full funding will also be canceled.
“It could mean nothing,” says Erin Burns, executive director of Carbon180, a nonprofit that advocates for the removal and reuse of carbon dioxide. “It could mean there’s a renegotiation of the awards. Or it could mean they’re entirely cut. But the uncertainty certainly doesn’t help projects.”
Battelle and 1PointFive didn’t immediately respond to inquiries from MIT Technology Review. Nor did the Department of Energy.
“Market rumors have surfaced, and Climeworks is prepared for all scenarios,” Christoph Gebald, one of the company’s co-CEOs, said in a statement. He added later: “The need for DAC is growing as the world falls short of its climate goals and we’re working to achieve the gigaton capacity that will be needed.”
“We aren’t aware of a decision from DOE and continue to productively engage with the administration in a project review,” Heirloom said in a statement.
The rising dangers of climate change have driven the development of the direct-air capture industry in recent years.
Climate models have found that the world may need to suck down billions of tons of carbon dioxide per year by around midcentury, on top of dramatic emissions cuts, to prevent the planet from warming past 2˚ C.
Carbon-sucking direct-air factories are considered one of the most reliable ways of drawing the greenhouse gas out of the atmosphere, but they also remain one of the most expensive and energy-intensive methods.
Under former President Joe Biden, the US began providing increasingly generous grants, subsidies and other forms of support to help scale up the nascent sector.
The grants now in question were allocated under the DOE’s Regional Direct Air Capture Hubs program, which was funded through the Bipartisan Infrastructure Law. The goal was to set up several major carbon removal clusters across the US, each capable of sucking down and sequestering at least a million tons of the greenhouse gas per year.
“Today’s news that a decision to cancel lawfully designated funding for the [direct-air-capture projects] could come soon risks handing a win to competitors abroad and undermines the commitments made to businesses, communities, and leaders in Louisiana and South Texas,” said Giana Amador of the Carbon Removal Alliance and Ben Rubin of the Carbon Business Council in a joint statement.
This story was updated to include additional quotes as well as added context on the development of the carbon removal sector.