That’s why government support like the DOE Regional DAC Hub program is so important, says Jack Andresen of Breakthrough Energy, an initiative founded by Bill Gates to accelerate technologies to reach net zero. “That’s how you build projects,” he says. The bipartisan infrastructure bill signed into law in 2021 set aside $3.5 billion in federal funds to help build four regional DAC hubs. That’s where the Louisiana and Texas projects are headed.
Climeworks is one of the companies working in the most qualified Louisiana DAC hub. 550 million dollars Federally funded. Eventually, the facility aims to capture and store more than 1 million tons of carbon dioxide annually underground. “If you want to build an industry, you can’t do it with a demonstration project,” says Daniel Nathan, Climeworks’ chief project development officer. “You have to actually spend money, not just talk about it, and say there are certain projects that could benefit from more funding.” Once the hub starts sequestering carbon, it will be eligible to claim up to $180 per ton of carbon stored under the Inflation Reduction Act’s extended tax credit 45Q.
These tax credits are important because they provide long-term support to companies that actually sequester carbon from the atmosphere. “There’s a guaranteed revenue stream of $180 per ton for at least 12 years,” says Andreasen. That’s especially important because the cost of capturing and storing a ton of carbon dioxide is likely to exceed the market price of carbon credits in the long term. Other forms of carbon removal, particularly forestation, are much cheaper than DAC, and removal offsets are also competitive with renewable energy offsets that don’t produce new emissions. Without additional government support, the DAC sequestration market won’t be able to sustain itself.
Most DAC industry experts interviewed by WIRED saw little political appetite to overturn the 45Q tax credit, which would allow companies to claim the credit for physically extracting more oil from existing reservoirs using carbon dioxide. But they were more concerned about the possibility that existing DOE funds set aside for DAC and other projects would not be allocated by a future administration.
“I think DOE is slowing down,” Andreasen said. “It just means it’s going to take longer to get the money out, and that’s not good.” Katie Lebling of the World Resources Institute, a sustainability nonprofit, agreed, saying there’s a risk that unallocated funding could slow down or even stop if the new administration takes a less favorable view of carbon removal.
The Heritage Foundation is not only skeptical of the carbon removal industry, but is also openly skeptical of climate change, writing in one report that the observed warming could “theoretically” be caused by: combustion of fossil fuelsAnd “this claim cannot be proven by science,” the foundation says in its Project 2025 plan. “Governments should not pick winners and losers, and should not subsidize the private sector to push resources to the market.”
