“No matter how fast we decarbonize the nation’s economy, we must tackle the legacy pollution already in our atmosphere to avoid the worst effects of climate change.”
That's the word from U.S. Secretary of Energy Jennifer M. Granholm, in a statement announcing $3.7 billion in programs designed to remove carbon dioxide from the atmosphere.
The spending, part of the Bipartisan Infrastructure Law, is split among four programs that are designed to build what the Department of Energy calls a viable, just, and responsible carbon dioxide removal industry in the U.S.
“President Biden’s Bipartisan Infrastructure Law provides the transformative investments needed to scale up the commercial use of technologies that can remove or capture CO2, which will bring jobs to our regions across the country and deliver a healthier environment for all Americans," Sec. Granholm said in a statement.
The investments are designed to accelerate private investment (an already frenetic area of dealmaking among venture capitalists); develop new monitoring and reporting practices, and provide grants to state and local governments to use products developed from captured emissions.
At every part of this chain of financing there are new technology companies that stand to benefit.
For the Biden administration, funding carbon dioxide removal technologies provide a way for the U.S. to take a leading position in a technology that most climate scientists see as vital if the world is to attempt to hit its goals for limiting global warming.
Beyond the infrastructure funding, the Inflation Reduction Act also includes tax credits for the capture and geologic storage of carbon dioxide, which should provide even more incentives, according to a Department of Energy statement.
The four new funding announcements include:
$3.5 billion in funding for regional direct air capture hubs through the DOE's Office of Clean Energy Demonstrations and the Office of Fossil Energy and Carbon Management. The DOE plans to develop four hubs, which will demonstrate a technology or group of technologies at commercial scale to capture at least 1 million metric tons of CO2 annually. The CO2 has to be used or permanently stored.
the Direct Air Capture Commercial and Pre-Commercial Prize, which provides $115 million in no-strings-attached prize money for direct air capture facilities for taking carbon dioxide out of the atmosphere.
Carbon Utilization Procurement Grants -- the Fossil Energy and Carbon Management division of DOE is responsible for distributing up to $100 million for grants to states, municipalities and public utilities to support commercialization of technologies that reduce carbon emissions and use those emissions in commercial or industrial products.
Finally, there's a Technology Commercialization Fund that will fund measurement, reporting and verification best practices for carbon removal
This is fantastic news for venture capital firms who have invested hundreds of millions of dollars into carbon utilization technologies and billions into carbon capture tech. Indeed, investors backed up over $1.5 billion in funding for carbon dioxide removal technology developers in the first half of 2022 alone.
These are businesses like Carbon Engineering, Noya Labs, Holy Grail, Sustaera, RepAir, Mission Zero, Verdox, and a whole host of other technologies. There are some technologies that use mineralization, like Lithos and Travertine Technologies to permanently sequester CO2 and they could benefit from the funding as well.
And for the startups turning carbon into a commodity the government cash could be another route to drive down costs for their products -- which are still years away from commercial scale.
These are businesses like CarbonCure, Carbicrete, which are making low emission concrete using captured CO2. Or companies like Twelve, LanzaTech, Mars Materials, and NanoSky Technologies, which are turning captured carbon dioxide into chemicals, fuels, water treatment additives, and carbon nanotubes.
The Bipartisan Infrastructure Law programs support the goals of DOE’s Carbon Negative Shot initiative, which calls for innovation in carbon dioxide removal pathways that will capture CO2 from the atmosphere and store it at gigaton scales for less than $100/net metric ton of CO2-equivalent, according to a DOE statement.
Since the beginning of last year, the DOE has funneled more than $250 million into 62 projects and design studies for carbon management that include both carbon removal and utilization projects, according to a statement.