That’s why government support like the Department of Energy’s Regional DAC Hubs program is so important, says Jack Andreasen of Breakthrough Energy, an initiative founded by Bill Gates to accelerate technologies to achieve net-zero. “It makes the projects happen,” he says. The bipartisan infrastructure bill signed into law in 2021 set aside $3.5 billion in federal funding to help build four regional DAC hubs, money that will go to projects in Louisiana and Texas.
Climeworks is one of the companies working on the Louisiana DAC Hub, up to $550 million With federal funding, the facility hopes to eventually capture more than 1 million tonnes of carbon dioxide per year and store it underground. “If you want to build an industry, you can’t do it with demonstration projects. You have to go beyond lip service and show you have specific projects that qualify for a larger share of funding,” says Daniel Nathan, Climeworks’ chief project development officer. Once the hub begins sequestering carbon, it will be eligible to claim up to $180 per tonne of carbon stored under the 45Q tax credit, an extension of the Curb Inflation Act.
These tax credits are important because they provide long-term support to companies that actually sequester carbon from the atmosphere. “They guarantee income of $180 per ton for a minimum of 12 years,” Andreasen says. This is especially important given that the cost of capturing and storing a ton of carbon dioxide is likely to exceed the market price of carbon credits for a long time. Other forms of carbon removal, especially forest plantations, are much cheaper than DAC, and removal offsets also compete with renewable energy offsets that avoid new emissions. Without additional support from governments, it’s unlikely that a market for DAC sequestration will be self-sustaining.
Most of the DAC industry experts WIRED spoke to saw little political appetite to repeal the 45Q tax credit, especially since it allows companies to claim tax credits for using carbon dioxide to physically extract more oil from existing reservoirs. But they were more concerned about the prospect that existing Department of Energy funds set aside for DAC and other projects might not be allocated under a future administration.
“I think there’s a chance that the Department of Energy could slow down,” Andreasen says, “which means it will take longer to distribute funds, and that’s not a good thing.” Katie Lebling of the World Resources Institute, a sustainability nonprofit, agrees, saying that if the new administration backs away from carbon removal, there’s a risk that unallocated funds could slow down and stall.
In addition to being suspicious of the carbon removal industry, the Heritage Foundation is also openly skeptical of climate change, arguing in one report that the observed warming is “theoretically” Burning fossil fuels“The claim cannot be scientifically proven,” the foundation said in its Project 2025 plan. “Governments should not pick winners and losers, and they should not subsidize the private sector to bring resources to market.”
