That’s why government support like the Department of Energy’s regional DAC center program is so important, said Jack Andreasen of Breakthrough Energy, a program founded by Bill Gates to accelerate technologies that move toward net-zero emissions. “This allowed the project to be built,” he said. The bipartisan infrastructure bill signed into law in 2021 sets aside $3.5 billion in federal funding to assist in the construction of four regional DAC centers. That’s money put into programs in Louisiana and Texas.
Climeworks is one of the companies participating in Louisiana’s DAC center, which is eligible for up to $550 million in federal funding. Ultimately, the facility aims to capture more than 1 million tons of carbon dioxide per year and store it underground. “If you really want to build an industry, you can’t do it with demonstration projects. You have to walk the talk and say that certain projects should be eligible for a larger share of funding. When the center starts sequestering carbon, Under the 45Q tax credit (extended under the Inflation Reduction Act), you will be eligible for a tax credit of up to $180 per ton of carbon stored.
These tax credits are important because they provide long-term support to companies that actually sequester carbon from the atmosphere. “You’ll get a guaranteed revenue stream of $180 per ton for at least 12 years,” Andreasen said. This is particularly important given that the cost of capturing and storing large amounts of carbon dioxide is likely to exceed the market price of carbon credits in the long term. Other forms of carbon removal, notably afforestation, are much cheaper than DAC, and removal offsets also compete with renewable energy offsets, which avoid new emissions. The DAC isolation market cannot be sustained without government supplementation.
Most DAC industry experts interviewed by Wired believe there is little political interest in reversing the 45-quarter tax credit, especially since it also allows companies to use carbon dioxide to physically extract more oil from existing reservoirs to claim the tax. credit. However, they are more concerned that existing funds set aside by the Department of Energy for DAC and other projects may not be allocated under future administrations.
“I do think it’s possible for the Department of Energy to slow down,” Andreasen said. “It just means it takes longer for the money to flow out, which is not a good thing,” agreed Katie Lebling of the sustainability nonprofit World Resources Institute. , unallocated funds could slow and stall if the new administration performs poorly on carbon reductions.
The Heritage Foundation is not only skeptical of the carbon removal industry but also openly skeptical of climate change, writing in a report that the observed warming can only be “theoretically” attributed to the burning of fossil fuels and that “this assertion Can’t be proven” by science. “Governments should not pick winners and losers, nor should they subsidize the private sector to bring resources to market,” the foundation said in its Project 2025 plan. “
