Sources say that the Energy Department may cut funding for US carbon removal hubs.
Three sources familiar with this matter have confirmed that the U.S. Department of Energy has been considering cutting hundreds of millions of dollar in grants for two projects in Texas or Louisiana, which are aimed at demonstrating commercial-scale technology to capture CO2 from the air.
Direct Air Capture hubs were developed by the DOE Office of Clean Energy Demonstrations as part of the former president Joe Biden’s efforts to reduce U.S. greenhouse gases emissions. The hubs are expensive and new technology for carbon removal. The two hubs, when fully operational, could remove over 2 million metric tonnes of carbon dioxide per year. This is more than the largest DAC plant operating in Iceland.
One of the largest U.S. hubs is Louisiana's Project Cypress. It is run by Battelle Research and Development, Climeworks Corporation, and Heirloom Carbon Technologies. The other major U.S. hubs include South Texas DAC Hub proposed by Occidental Petroleum, 1PointFive subsidiary Carbon Engineering, and Worley.
Sources said that the projects were on a list with programs from Biden's era which are being targeted for elimination to fund tax reductions in Congress’s budget reconciliation bill. Chris Wright, Energy Secretary, is currently reviewing this bill. The sources requested anonymity as they were not authorized to speak in public.
Biden awarded the two hubs $550 and $500 million, respectively. However, they have only received $50 million each in their initial tranche.
A spokesperson for the Energy Department said that a review was being conducted to ensure all programs are aligned with priorities of the Trump administration. The spokesperson stated that the review was ongoing and anonymous sources' speculations about its results were just that: speculation.
Sources said that the roughly 20 smaller DAC projects identified for funding by Biden's Administration were not included on the list and their status is unclear.
Sources involved in the project said that the capital-intensive projects could not continue without the remainder of their grants. They also couldn't survive two months of uncertainty while Wright made his final funding decisions.
Louisiana officials increased the pressure this week on Wright and the state’s congressional delegation to save funding for the DAC hub.
Susan Bonnett Bourgeois, Louisiana's Secretary of Economic Development, wrote to U.S. Senators and Representatives on Thursday: "I urge you contact DOE Secretary Chris Wright to ask him to do everything possible to advance this critical federal grant."
Occidental didn't respond to a comment request on possible hub cuts, but stated on its February investor call that the company had spoken with President Donald Trump several times about the need for DAC technologies and subsidies.
(source: Reuters)
