The US government is offering $3.5 billion in grants to support the development of Direct Air Capture (DAC) technology. The funding will be used to build factories that will capture and permanently store greenhouse gases. This is the largest such effort globally to help halt climate change through DAC. The government has expanded a tax credit to $180/tonne to support the technology’s development.
Nine applications have been filed in the first round, with two major projects seen as strong contenders. The government is offering three levels of funding: $3 million for early stage feasibility studies, $12.5 million for engineering design studies, $500 million for projects ready to complete the procurement, construction and operation phases.
Companies such as Swiss start-up Climeworks have raised more than $800 million to date and are among the most active firms so far. The company plans to boost headcount from the low double-digits to more than 100 over the next 18 months. It aims to create 3,500 direct jobs and tens of thousands of indirect jobs by 2030 if given the green light.
Carbon Capture Efforts
CarbonCapture Inc. in partnership with Frontier Carbon Solutions and a new company called Twelve are bidding for funding. They will use captured carbon to make sustainable aviation fuel in Wyoming. Jonas Lee, chief commercial officer for CarbonCapture, says they expect to hit $250 a ton by 2030 and $150 a ton within a decade.
Occidental Petroleum is well positioned for federal grants for what could be the largest DAC plants in the world. It has not confirmed whether it applied for support for two DAC projects it is developing in Texas. However, Erin Burns, executive director of Carbon 180, a DAC consultancy, hopes to see hubs that don’t have ties to fossil fuel production.
Cost and Scale of DAC Technology
DAC Technology can cost more than $1,000 to capture and lock away a ton of planet-warming carbon dioxide, yet the U.S. government has targeted a $100 a ton price tag.
Companies such as Heirloom Carbon, a California company that has applied for a Louisiana hub, see that as a realistic goal. CarbonCapture expects costs of $250 a ton by 2030 and $150 a ton within a decade
The US government’s grant program to support Direct Air Capture technology is expected to have a significant impact on combating climate change.
