U.S. Energy Department Reopens $2.25 Billion Funding Program to Foster Carbon Capture Technology

The U.S. Department of Energy has announced a $2.25 billion funding opportunity to support carbon capture, utilization, and storage and carbon dioxide removal to reach climate goals. This marks the third opening of the Carbon Storage Validation and Testing program to support the transport and storage of carbon dioxide captured from industrial and power generation facilities, as well as legacy CO2 emissions removed directly from the atmosphere. The initiative supports the Biden administration’s goal is to achieve a net-zero emissions economy by 2050.

The program, supported by the 2021 Infrastructure Investment and Jobs Act, is designed to facilitate new and expanded carbon storage projects. These initiatives fall under Carbon Storage Assurance Facility Enterprise Initiative, each intended to store over 50 million metric tons of CO2 over a 30-year period.

The department re-opened the funding opportunity in July with modifications to accept applications under a broader scope, which include storage complex feasibility, permitting, and construction stages of project development. Multiple openings allow for continued development of infrastructure with a focus on feasibility determination, site characterization, planning, permitting, and construction.

Since the start of 2021, the department has announced over $841 million for various projects focused on researching, developing, and deploying carbon transport and storage technologies and infrastructure. This includes $686 million allocated to 25 storage projects selected in May and November through previous closings of the funding opportunity and aims for better economic growth, technological innovation, and high-wage job creation in the clean energy and industrial sectors.

Among other actions, in August, the department announced up to $1.2 billion for commercial-scale direct air capture projects. The White House has established a committee focusing on safe and efficient removal and sequestration of marine carbon dioxide.

The U.S. Department of Agriculture’s Forest Service proposed a rule in November to allow the consideration of carbon capture and sequestration, or CCS, projects on national forests and grasslands. The proposal aimed to exempt CCS from regulations restricting exclusive and perpetual use of National Forest System lands. Approximately 1.2 gigatons of CO2 need sequestration annually by 2030 to meet climate goals.

Recent state-level initiatives include Colorado’s carbon management roadmap and New York’s carbon farming tax credits. However, some Midwest CCS projects face setbacks due to regulatory challenges.

In announcing the reopening of the funding opportunity, the department emphasized that continual openings will foster the growth of commercial-scale carbon storage infrastructure. Applications are due by Feb. 20, 2024.