Government, funded
Reading carbon removal wins in the latest FY24 appropriations
If you listened carefully last Friday evening, you could probably hear a huge sigh of relief among many an overworked Congressional staffer as the first minibus was signed into law by the President. With the second tranche of funding well on its way to the President’s desk in short order, we’ll be able to finally close the books on an adventurous FY2024.
Consider this a love note to those that put much toil, weeks-upon-weeks of long hours, and little sleep to craft these agreements. Government funding agreements are vital and help millions of families, communities, and businesses across the country.
Here at the Carbon Removal Alliance, we work with some of those small businesses. These entrepreneurs have developed mind-boggling innovations that will help us meet our climate goals — despite generations of continued reliance on fossil fuels and inattention to the scientific clarity of our changing climate.
These folks are hard at work in labs and on first-of-a-kind projects across the country, from Colorado to Virginia and many places in between. They’re working with farmers in Iowa, the Dakotas, Wisconsin, and Minnesota (to name a few) on soil amendments that will enrich the soil, increase crop yields, and permanently remove carbon from the atmosphere for a millennia or more.
There’s much for the carbon removal community to celebrate in these appropriations bills. Here’s our read out:
The Purchase Prize gets $20 million to continue beyond its first year.
Unlike other climate technologies, such as renewable energy or electric vehicles, carbon removal solutions have limited existing markets to sell into. That’s because carbon removal is a public good, like the roads we drive on, the great schools that my nieces attend, the Fire Department that arrives in an emergency, or our national defense. It’s a product that benefits us all.
For the very first time, the Department of Energy (DOE) has been instructed by Congress to dedicate $20 million to an existing competitive carbon removal purchasing pilot program. This program was launched last year by DOE, but until now, the program lacked dedicated funding to continue beyond its first year. This program puts the government in a position to buy carbon removal, taking the first step to offering it as a public good long-term. Today, some private sector purchases exist as part of voluntary corporate action, but these purchasers cannot scale the industry alone. These buyers, Stripe, Boeing, JP Morgan Chase, Microsoft, Shopify and the like, are looking for government partnership to derisk early purchases and set high standards for carbon removal projects. This purchasing program positions the government as the critical customer for the industry and unlocks private sector capital.
More critical agency support for geologic storage
Carbon removal must be durable over timescales comparable to the atmospheric lifetime of carbon emissions, which is why the Carbon Removal Alliance is focused on policies that support pathways with permanence of 1,000 years or more. One necessary storage option involves the injection of CO2 more than a mile below the surface, well below the water table, to keep all our sources of drinking water safe from contamination while locking away the carbon. These are called Class VI wells which are overseen by the Environmental Protection Agency (EPA).
Carbon removal companies need thorough and expedient evaluation of Class VI well applications, whether that’s done by EPA or states filling this regulatory capacity when they’re capable of upholding the same high standards of safety currently required by the EPA.
This time around, Congress has asked the EPA to report a detailed plan for consideration of the transition of Class II wells which house fluids associated with oil and natural gas production to Class VI wells within 270 days (so, end of the year). They’ve also dedicated $5 million to develop expertise and capacity at EPA for the Class VI underground injection program and another $1.2 million to support regulatory training and education for states to support any appropriate move towards state primacy.
Government should be well-resourced to make high-quality decisions as expeditiously as possible. Not every Class VI well application should be approved. States that aren’t willing to meet rigorous standards that match the EPA’s commitment to safe drinking water shouldn’t be given primacy. But at the very least, we need to resource our government so that companies can get the clarity on regulatory guidelines and timelines to scale these critical businesses.
Support for marine CDR regulatory clarity
Right now, permitting processes around our nation’s waterways and oceans is written to protect from pollution, keeping these resources clean and safe for humans and ecosystems alike. This must remain the paramount mission moving into the future.
At the same time, marine carbon removal (mCDR) remains a critical avenue with tremendous potential to meet our climate and environmental goals like fighting ocean acidification. Innovators must also be given the space to explore safe ways to use the ocean to pull CO2 from the atmosphere. We need to design a regulatory scheme that can achieve both objectives. An oil spill cannot be treated the same as seawater electrolysis, ocean alkalinity enhancement, or biomass sinking.
The $250,000 agreement gives DOE authority to work with other agencies and industry partners to develop, test, and evaluate mCDR. In October 2023, the White House Office of Science and Technology Policy (OSTP) announced a new Fast Track Action Committee (FTAC) on mCDR, which is charged with creating, among other things, recommendations and guidelines for policy, permitting, and regulatory standards for mCDR research and implementation. We expect this funding to help DOE support these efforts moving forward.
Continued commitment to fund and develop carbon removal RD&D
On top of rapid emissions cuts, the world needs gigatons of permanent carbon removal within the next three decades to avoid the worst impacts of climate change. But new technologies take time to develop, and — from the foundations of the internet to developing life-saving vaccines in a matter of months — the government has always played a critical role in spurring, researching, and developing the solutions for the future.
The agreement funds carbon removal RD&D across DOE for a total of $118 million. It specifies that $23 million goes to the Office of Energy Efficiency & Renewable Energy (EERE), $70 million for the Office of Fossil Energy and Carbon Management (FECM), and $25 million for the Office of Science.
This, unfortunately, represents a decline from the $140 million that was allocated in the year before which is not entirely unexpected because of the 2023 budget deal that Biden struck with then-Speaker McCarthy that required a $1 billion cut in non-defense discretionary spending outside of veterans health care.
While we are sure to be on the front foot pushing for more carbon removal RD&D funding in the future, this existing allocation of money will allow for invaluable discoveries in the years to come. This funding furthers DOE’s Carbon Negative Shot goals and programs like it get resources to labs, scientists, engineers, and many of the most brilliant minds that are the foundation of a gigaton scale solution.
The job isn’t done yet, and the Carbon Removal Alliance is already charting a course for a successful FY25 to fill the gaps we see emerging in the field. But in this moment, we express our sincerest gratitude to the staff and members that championed these requests — not least among them Chairman Patty Murray, Vice Chair Susan Collins, and their valiant staff that have delivered catalyzing wins for the future of carbon removal.
