Christoph Gebald, the CEO of Climeworks, acknowledged \u201cmarket rumors\u201d in an email, but said that the company is \u201cprepared for all scenarios.\u201d <\/p>\n
\u201cDemand for removals is increasing significantly, with momentum set to build as governments set their long-term targets,\u201d he said. \u201cThe need for DAC is growing as the world falls short of its climate goals and we\u2019re working to achieve the gigaton capacity that will be needed.\u201d<\/p>\n
Heirloom\u2019s head of global policy, Vikrum Aiyer, said that the company was not aware of any decision from the DOE and continued \u201cto productively engage with the administration in a project review.\u201d He added that Heirloom remains \u201cincredibly proud to stand shoulder to shoulder with Louisiana energy majors, workforce groups, non-profits, state leaders, the governor and economic development organizations who have strongly advocated for this project.\u201d<\/p>\n
Much of the rest of the list overlaps with the project terminations the agency announced last week<\/a> as part of a spate of retributive actions against Democrats during the government shutdown. \u201cNearly $8 billion in Green New Scam funding to fuel the Left\u2019s climate agenda is being canceled,\u201d White House Budget Director Russ Vought<\/a> wrote on social media ahead of the announcement.<\/p>\n DOE spokesperson Ben Dietderich told me by email that the department was \u201cunable to verify\u201d the new list of canceled grants, and that \u201cno further determinations have been made at this time other than those previously announced.\u201d<\/p>\n \u201cAs [Secretary of Energy Chris Wright] made clear last week, the Department continues to conduct an individualized and thorough review of financial awards made by the previous administration,\u201d Dietderich said.<\/p>\n Direct air capture is a nascent technology that sucks carbon, as the name suggests, directly from the air, and is one of several carbon removal<\/a> solutions with potential to slow global warming in the near term, and even reverse it in the long run. The $3.5 billion DAC Hubs program, created by Congress in the 2021 Bipartisan Infrastructure Law, promised to \u201cestablish a new sector of the American economy and remake another one, while providing the world with an important tool to fight climate change,\u201d as my colleague Robinson Meyer put it<\/a>. <\/p>\n After a competitive application process, the Biden administration selected two projects that would receive up to $600 million each to build DAC projects capable of removing more than 1 million tons of carbon from the atmosphere per year and storing it permanently underground. Occidental, which first partnered with and later acquired a Canadian DAC startup called Carbon Engineering, would build its hub in South Texas, near Corpus Christi. Two other leading DAC startups, the California-based Heirloom Carbon and Swiss company Climeworks, would work together to build a hub in Louisiana. After the selections were announced, both projects received an initial $50 million award<\/a> for their next phase of development, which was set to be matched by private investment. <\/p>\n “These hubs were selected through a rigorous and competitive process designed to identify projects capable of advancing U.S. leadership in carbon removal and industrial decarbonization,\u201d Jennifer Wilcox<\/a>, the former principal deputy assistant secretary for the DOE\u2019s Office of Fossil Energy and Carbon Management, told me in an email. \u201cThe burden should be on DOE to clearly demonstrate why that process is being overturned.\u201d<\/p>\n All three companies already have demonstration plants that are either operating or under construction. Climeworks began operating the world\u2019s first commercial DAC plant<\/a> in Iceland in 2021, designed to capture about 4,000 tons per year, and has since scaled up<\/a> to a larger plant more than eight times that size. Heirloom opened the first DAC plant in the U.S. in November 2023, in Tracy, California, capable of capturing 1,000 tons per year. Occidental\u2019s first DAC project, Stratos, in West Texas, will be the largest of the bunch, designed to capture 500,000 tons per year. It is set to be completed in the next few months.<\/p>\n Removing carbon from the air with one of these facilities is currently extremely expensive and energy-intensive. Today, companies pre-sell carbon credits to airlines and tech companies to raise money for the projects, but will likely require government support to continue to innovate and bring the cost down. While both Climeworks<\/a> and Heirloom<\/a> announced the sale of credits that would support their DAC hub projects, it\u2019s not clear whether those credits were meant to be fulfilled by the projects themselves. <\/p>\n The DOE grants would have helped prove the viability of the technology at a scale that will make a measurable difference for the climate, while also demonstrating a potential off-ramp for oil companies<\/a> and the economies they support. Both projects said they expected to create more than 2,000 local jobs in construction, operations, and maintenance. <\/p>\n \u201cThe United States, up to this point, was the direct air capture leader and the place where top innovators in the field were choosing to build facilities as well as manufacture the actual components of the units themselves,\u201d Jack Andreasen Cavanaugh, a global fellow at the Columbia University\u2019s Carbon Management Research Initiative, told me. \u201cThe cancellation of these grants to high-quality projects ensures that these American jobs will be shipped overseas and cede our broader economic advantage.\u201d<\/p>\n That\u2019s already happening. On the same day last week that the DOE announced it was terminating an award for CarbonCapture Inc., another California-based DAC company, the startup said it would move its first commercial pilot<\/a> from Arizona to Alberta, Canada. Gebald, of Climeworks, said the company has \u201ca pipeline of other DAC projects around the world,\u201d including opportunities in Canada, the U.K., and Saudi Arabia.<\/p>\n Cavanaugh also pointed out there was a disconnect between the terminations, Congress\u2019 recent actions, and even actions under the first Trump administration. Trump\u2019s DOE revised the 45Q tax credit for carbon capture in 2018 to allow direct air capture projects to qualify. In July, the reconciliation bill preserved that credit and strengthened it<\/a>. \u201cThese were bipartisan-supported projects, and it goes expressly against congressional intent.\u201d<\/p>\n