That’s why government support like the DOE Regional DAC Hubs program is so crucial, says Jack Andreasen of Breakthrough Energy, an initiative founded by Bill Gates to accelerate technology to achieve net-zero emissions. “It gets projects started,” he says. The bipartisan Infrastructure Law signed in 2021 allocated $3.5 billion in federal funds to assist build four regional DACs. That money is going to projects in Louisiana and Texas.
Climeworks is one of the companies working on a DAC hub in Louisiana that qualifies for the 550 million dollars in federal funding. The facility ultimately aims to capture more than 1 million tons 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 back up your words and say there are certain projects that should be eligible for a larger portion of the funding,” says Daniel Nathan, director of project development at Climeworks. Once the hub starts sequestering carbon, it will be eligible for up to $180 per ton of carbon dioxide stored under the 45Q tax credit, which was extended under the Inflation Reduction Act.
These tax breaks are crucial because they provide long-term support for companies that actually sequester carbon dioxide from the atmosphere. “You have a guaranteed revenue stream of $180 per ton for at least 12 years,” Andreasen says. This is especially crucial given that the costs of capturing and storing a ton of carbon dioxide are likely to exceed the market rate of carbon credits for a long time. Other forms of carbon removal, notably planting forests, are much cheaper than DAC, and removal offsets also compete with renewable energy offsets that prevent up-to-date emissions. Without a government subsidy, it is unlikely that the DAC sequestration market will be sustainable.
Most DAC experts WIRED spoke with felt there was little political appetite to repeal the 45Q tax credit—not least because it also allows companies to claim a tax credit for using carbon dioxide to physically extract more oil from existing deposits. But they were more concerned about the prospect that existing DOE funds earmarked for DAC and other projects might not be allocated under a future administration.
“I think slowing DOE is possible,” Andreasen says. “It just means the money takes longer to get out, and that’s not great.” Katie Lebling of the World Resources Institute, a nonprofit focused on sustainable development, agrees, saying there’s a risk that unallocated funds could be slowed and stopped if the up-to-date administration is less favorable to carbon removal.
The Heritage Foundation not only doubts the carbon dioxide removal industry, but also openly expresses skepticism about climate change, writing in one report that observed warming could only be caused “theoretically.” burning fossil fuelsand that “this claim cannot be scientifically proven.” In its Project 2025 plan, the foundation states that “government should not pick winners and losers and should not subsidize the private sector to bring resources to market.”