Keaton PetersThe U.S. is doubling down on investments in technology that takes climate-warming pollution out of the air. The U.S. Department of Energy’s Office of Clean Energy Demonstrations (OCED) has opened a $1.8 billion funding opportunity to accelerate the development of direct air capture (DAC) facilities across the country. The program will support construction of both mid-scale and large-scale facilities that can pull carbon dioxide directly from the atmosphere.
The funding represents the latest phase of DOE’s $3.5 billion Regional DAC Hubs program, established through the 2021 Infrastructure Investment and Jobs Act. The program is designed to create four domestic hubs capable of capturing at least 1 million metric tons of CO2 annually from the atmosphere, either storing it underground or converting it into new products.
OCED selected two major DAC hub projects in Louisiana and Texas for development, which began implementation in September 2024 after receiving grant funding. The remaining 19 projects received support for feasibility studies and engineering designs to evaluate future hub demonstrations.
With increasingly intense storms, floods and wildfires, global pressure is mounting to reduce atmospheric carbon dioxide levels, and direct air capture technology is emerging as a crucial tool for addressing legacy emissions. The technology, while still developing, could provide a pathway for industries and communities to remove historical carbon pollution while creating new economic opportunities in clean energy.
The funding is divided into three categories targeting different stages of DAC development. The largest portion will support 2-6 commercial facilities that can capture at least 25,000 tons of CO2 annually, with individual projects eligible for up to $600 million. Another segment looks to fund 4-8 mid-scale facilities capturing between 2,000-25,000 tons per year, offering up to $50 million per project. The program will also support 1-3 infrastructure platforms providing DAC developers with access to clean energy and CO2 storage or utilization systems, with grants up to $250 million.
OCED plans to offer multiple rounds of funding over several years to support the rapidly advancing DAC industry. This approach is meant to ensure newer technologies and high-impact projects can access support as the sector evolves. The agency is also working to ensure DAC projects deliver community benefits while addressing key challenges around carbon transport and storage.
The full Notice of Funding Opportunity is available through the Department of Energy website. Organizations interested in applying must submit concept papers or pre-applications by January 31, 2025, with full applications due July 31, 2025. OCED will host an informational webinar on January 13 to provide additional details about the opportunity.
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