The DOE has $3.5 billion to spend on carbon removal. Now what?

Removing carbon dioxide from the atmosphere remains a big challenge. Technologies exist that can pull CO2, an extremely diffuse molecule, out of thin air, but the industry is in its very early stages. It also needs to scale in record time in order to have a chance at keeping the global temperature in line with Paris Agreement goals.

The infrastructure law passed in November includes $3.5 billion for four regional direct-air capture (DAC) hubs across the US, which aim to remove at least 1 million metric tons of CO2 each per year. This federal support could be a massive step forward for carbon-removal tech worldwide—operating just one of these hubs would mean 100 times as much CO2 being pulled from the air than today’s global DAC capacity, though that is still far short of the 10 billion tonnes needed by 2050 to meet the Paris Agreement targets.

But there are still plenty of questions about how the US Department of Energy will select and design these sites.

“The DAC hubs have the potential to really unlock a lot of the problems that currently exist,” Peter Minor, director of science and innovation at climate-focused nonprofit Carbon180, told Emerging Tech Brew. “What we’re really looking forward to next is guidance from DOE on exactly what they’re hoping to accomplish with these DAC hubs, what will be included, and how they’ll be deploying the capital that they have allocated for it.”

Removal requirements

The federal government has until mid-May to release eligibility requirements for DAC hub applications, and in the meantime, industry stakeholders are making their own recommendations.

“We’re so early in this space that we should be trying to be as inclusive as possible,” Minor said. “Supporting—broadly—innovation is going to lead to better outcomes for the real goal, which is the gigatonne scale.”

Carbon180 provided a response to the DOE’s request for information about the hubs in February. In a letter endorsed by several DAC startups, including CarbonCapture, Heirloom, and Noya, the nonprofit outlined priorities for selecting locations and companies for these operations that it says would foster inclusivity and innovation.

One big question is whether the 1-million-tonne scale outlined in the legislation will be used as a goal or as a prerequisite, since the latter could preclude early-stage methods from participating, DAC company executives told us.

“We think it’s really important that that is not a threshold for an individual technology,” Max Scholten, head of commercialization at DAC startup Heirloom, said. “We think that would be a bit of a shame. Not to mention, there are no direct-air-capture companies that could do that.”

DAC company executives are hoping that this federal funding will instead support different technologies in multiple deployments, which together will add up to the 1-million-tonne goal.

There are various DAC strategies, none of which have been proven at scale so far. For example, CarbonCapture’s process uses a dehumidifier and a mineral called zeolites, Noya adds a proprietary “sponge” material to suck CO2 out of air that flows through cooling towers, while Heirloom uses accelerated carbon mineralization to store CO2 in limestone.

“The funding itself should be accessible in various stages—from proof of concept or early-stage ideas through to projects that are at hundreds of thousands of tonnes or growing to millions of tonnes,” Adrian Corless, CEO of CarbonCapture Inc. told us. “It’s this idea of allowing lots of on-ramps, and then still a vision for getting the best ones to get larger.”

One way to make sure smaller companies have a chance to benefit from this federal backing is for the DOE to invest in carbon-removal infrastructure at these hubs, which multiple DAC companies can use. That could allow companies to focus only on improving their tech and driving costs down, rather than using resources to pay for clean energy or CO2 compression, transport, and storage.

Site selection

The infrastructure law instructs the DOE to put the four DAC hubs in different regions of the country, two of which are to be located in economically distressed communities with “high levels of coal, oil, or natural gas resources.” The legislation also prioritizes areas with “existing or recently closed carbon-intensive fuel production or industrial capacity” and selecting sites close to opportunities for carbon sequestration or utilization.

Current methods of transporting CO2 over long distances leave room for leakage and add to the operation’s total environmental impact, DAC company execs told us. Injecting captured CO2 underground is a permanent carbon-removal solution, but the process of establishing new geological storage space today is very long and expensive. Right now, there’s only one operational site in the entire country where CO2 can be injected, according to the EPA.

It’s a logistical challenge for the DAC hubs, Josh Santos, co-founder and CEO of Noya, told us.

"We’re going to need a lot of infrastructure for this. I think we’re going to need CO2 transportation, pipelines, maybe we need different railways to actually move CO2,” he said. “The [hub locations] will determine the amount of transportation that may or may not be needed. So we’ll have to see where that goes.”

All about scale

Scientists estimate about 10 billion tonnes of CO2 need to be removed from the atmosphere globally each year by 2050 in order to meet climate goals. Today, DAC operations are removing about 10,000 annually.

“The industry needs to be doing tens of millions of tonnes over the next five years to have any chance of being on [a] trajectory to get to 10 gigatonnes in 25 years,” Corless said.

DAC technology will only potentially be cost-effective once it’s able to capture megatonnes of CO2 per year. Both CarbonCapture and Heirloom aim to reach that scale by the end of the decade, while Noya is aiming to scale to 100,000 tonnes per year over the next five years. Executives from the companies say funding and infrastructure from the DAC hubs could help them get there.

While DAC is still very expensive, companies say that even now, before the hubs are built, they are already seeing increasing demand for carbon removal from the private sector.

“The commercial market, the voluntary market for carbon removal, is growing really, really significantly,” Scholten said, noting that Heirloom has seen an acceleration just since the start of 2022.