DOE doubles down on carbon removal with first-of-its-kind purchasing and innovation investments

A new notice of intent and selection notifications for the Regional DAC Hubs program signal the next phase of carbon removal in the US

Photo by Cristian Escobar on Unsplash

It’s another good day to work in carbon removal. Today, the Department of Energy made two major industry-fortifying announcements: a first-of-its-kind notice of intent (NOI) centered around their Carbon Negative Shot and the initial round of selections for the Regional Direct Air Capture (DAC) Hubs program. In climate circles, carbon removal is now recognized as a critical component of meeting ambitious climate goals, and the investments outlined by DOE today show they’re taking this charge seriously. We applaud DOE’s leadership in catalyzing high-quality carbon removal at scale.

Here are a few reasons why these announcements are monumental:

1. This is the first time we’re seeing DOE fund a portfolio of permanent carbon removal technologies.
2. There’s also scale — not only is this the largest deployment of funding to-date, it’s also the first time we’ll see projects at the million-ton scale.
3. The R&D strategies employed by DOE, like direct purchasing, are uniquely suited to the needs of carbon removal solutions.

Building a technology-neutral market for carbon removal

The NOI released yesterday includes a number of provisions aimed at scaling carbon removal in line with DOE’s Carbon Negative Shot, an initiative with a goal of bringing a suite of carbon removal solutions to gigaton scale for less than $100 per ton of CO2 . The NOI includes funding for carbon removal demonstrations and investments in monitoring, reporting, and verification (MRV), but most notably launches a landmark purchasing program.

Carbon removal procurement has gained significant traction in the last year, and for good reason: unlike other climate technologies, such as renewable energy or electric vehicles, carbon removal solutions have limited existing markets to sell into. The purchasing program outlined in the Carbon Negative Shot NOI will unlock a critical early market for carbon removal solutions and provide necessary proof of revenue for companies trying to raise funding or finance projects. This purchasing program represents an unparalleled step towards commercializing carbon removal technologies.

By becoming a carbon removals customer directly, DOE also has the opportunity to help shape the definition of high-quality carbon removal. Lack of robust MRV has been a significant gap preventing carbon removal from scaling. Today, it’s difficult to differentiate between high-quality, permanent carbon removal and low-quality or fraudulent carbon removal, which leaves interested purchasers on the sidelines. With this new program, DOE has an opportunity to not only set standards for its own purchases but also leverage its work to build trust in the market and influence private sector purchasers and other governments interested in building similar programs. The bar DOE sets will have ripple effects for years to come.

Supporting deployment at the million-ton scale

DOE also doubled down on its commitment to deploying carbon removal technologies in the real world with its first round of funding selections for the Regional DAC Hubs Program.

With $3.5 billion in federal funding, the Regional DAC Hubs program will increase global DAC capacity over 400 times. These projects will be the first carbon removal projects deployed at the million-ton scale, an important level of deployment for validating technology, pressure testing logistics and supply chains, and bringing down costs. Even more, these projects will provide critical intel on how to deploy carbon removal solutions responsibly, and DOE has done significant ground work to ensure that projects center community engagement, autonomy, and benefits.

These project selections are an essential step toward large-scale deployment of carbon removal technologies. CRA is excited to see our members, including Climeworks, Heirloom, 8 Rivers, CarbFix, and Sustaera, named on the list of recipients and recognized as direct air capture leaders.

Leading the next phase of carbon removal

Policy is critical to catalyzing the carbon removal industry, and the investments included in DOE’s Carbon Negative Shot NOI and the Regional DAC Hubs Program will no doubt have a monumental impact on the field. The Carbon Removal Alliance was founded to champion policies and programs — like those outlined in today’s Carbon Negative Shot NOI — that can bring high-quality, permanent carbon removal to scale. We’re excited to continue to work with DOE as they develop and deploy these programs.