That’s why government support, like the DOE’s regional DAC hub program, is so important, says Jack Andreasen of Breakthrough Energy, the initiative founded by Bill Gates to accelerate net-zero technology. “This gets projects built,” he says. The Bipartisan Infrastructure Act signed in 2021 set aside $3.5 billion in federal funding to help build four regional DAC hubs. This is money that’s going toward the Louisiana and Texas projects.
Climeworks is one of the companies working in the Louisiana DAC center, which is eligible for up to $550 million In federal funding. Over time, the facility aims to capture more than a million tons of carbon dioxide each year and store it underground. “If you want to build an industry, you can’t do it with demonstration projects. You have to put your money where your mouth is and say there are certain projects that should be eligible for a larger share of funding,” says Daniel Nathan, director of project development at Climeworks. When the center begins sequestering carbon, it will be eligible to claim up to $180 for each ton of carbon stored, under the 45Q tax credit, which was extended under the Inflation Reduction Act.
These tax credits are important because they provide long-term support to companies that actually capture carbon from the atmosphere. “What you get is a guaranteed revenue stream of $180 per tonne for a minimum of 12 years,” Andreasen says. It’s particularly critical given that the costs of capturing and storing a tonne of carbon dioxide are likely to exceed the market rate for carbon credits for a long time. Other forms of carbon removal, particularly planting forests, are much cheaper than DAC, and removal offsets also compete with renewable energy offsets, which prevent new emissions from being emitted. Without a government match, a market for DAC sequestration is unlikely to be able to sustain itself.
Most DAC industry experts WIRED spoke to thought there was little political interest in rolling back the 45Q tax credit, especially since it also allows companies to claim a tax credit for using carbon dioxide to physically extract more oil from existing fields. They were more concerned, however, about the possibility that existing DOE funds set aside for DAC and other projects would not be allocated under a future administration.
“I think it’s possible that the Department of Energy will slow down,” Andreasen says. “That means it takes longer for money to get out, and that’s not good.” Katie Lebling of the World Resources Institute, a sustainability nonprofit, agrees, saying there’s a risk that unallocated funding could slow and stagnate if a new administration takes a dimmer view of carbon removal.
The Heritage Foundation is not only dubious of the carbon removal industry, but is openly skeptical of climate change, writing in a report that the observed warming could only “theoretically” be due to burning of fossil fuelsand that “this claim cannot be proven by science.” In its Project 2025 plan, the foundation says that “the government should not pick winners and losers and should not subsidize the private sector to bring resources to market.”
