U.S. Energy Department Announces $1.2 Billion for Two Direct Air Capture Hubs

The U.S. Energy Department on Aug. 11 announced up to $1.2 billion to develop two large-scale direct air capture, or DAC, plants in Louisiana and Texas. This represents the most substantial global investment in engineered carbon removal to date, according to the department. Each Hub is expected to eventually eliminate over 250 times the carbon dioxide volume compared to the largest DAC facility currently operating.

DAC is a process that separates carbon dioxide, or CO2, from the air, thus reducing legacy CO2 in the atmosphere. This CO2 can be permanently stored underground or converted into useful products such as concrete that prevent its release back into the atmosphere.

The two pioneering facilities, the first of their magnitude in the U.S., were selected initially from the Regional DAC Hubs program, funded by the 2021 Infrastructure Investment and Jobs Act, or IIJA. The program’s objective is to establish a network of carbon removal areas to address carbon dioxide pollution and complement emission reduction efforts.  These initiatives are expected to annually eliminate over 2 million metric tons of CO2, which is comparable to the emissions of approximately 445,000 cars running on gasoline, while also creating 4,800 jobs in support of the President’s Justice40 Initiative.

The two initiatives are:

• Project Cypress, led by Battelle with partners Climeworks Corp. and Heirloom, aims to capture over one million metric tons of carbon dioxide annually, creating around 2,300 jobs. Ten percent of the workforce goal for former fossil fuel industry workers, with a focus on community input and diversity.
• The South Texas DAC Hub in Texas, led by 1PointFive, Carbon Engineering Ltd., and Worley, targets the annual removal of one million metric ton of carbon dioxide, employing saline geologic storage, generating 2,500 jobs with a focus on local hiring, and involving the community through a Citizen Advisory Board.

The IIJA allocated $3.5 billion for direct air capture. In May 2022, the department announced the launch of the Regional Direct Air Capture Hubs program to support four large-scale hubs that each comprise a network of CO2 removal projects. In the initial funding announcement, the department allocated over $1.2 billion to start the process for conceptualizing, designing, planning, constructing, and operating DAC hubs. In Aug. 2023, the Office of Clean Energy Demonstrations announced selected projects for award negotiations.