$800M Baton Rouge BECCS Plant Marks Turning Point for U.S. Carbon Capture

A 15-year partnership will capture and store 680,000 tons of biogenic CO₂ annually, backed by federal incentives and growing corporate demand for carbon removal.

A 15-year partnership between AtmosClear and ExxonMobil is set to transform Louisiana's Port of Greater Baton Rouge into a key player in the carbon removal market. Starting in 2029, the biomass energy with carbon capture and storage (BECCS) facility will capture 680,000 metric tons of biogenic CO2 annually, making it one of the largest carbon dioxide removal projects in the United States. This partnership shows how industrial-scale carbon removal is moving from theory to commercial reality.

>> RELATED: What It’ll Really Take to Make Carbon Capture and Storage Work

What Makes This Deal Different

Fidelis New Energy, the Houston-based parent company of AtmosClear, isn't just building another carbon capture plant. They're creating a fully integrated system that turns agricultural waste into clean energy while permanently removing CO2 from the atmosphere. The facility will use sustainable feedstocks like sugarcane bagasse and responsibly managed forest products to generate renewable baseload power. What's captured gets pumped more than a mile underground through ExxonMobil's sprawling CCS infrastructure.

ExxonMobil brings serious infrastructure to the table. Their carbon capture and storage system includes a 1,300-mile CO2 pipeline network, Class VI injection wells, and advanced monitoring technology. It's currently the largest operational CCS system in the world, and this deal marks their fifth offtake agreement in Louisiana alone.

The Microsoft Connection and Corporate CDR Demand

This project didn't happen in a vacuum. Back in April 2025, Microsoft signed a 15-year carbon dioxide removal agreement with Fidelis AtmosClear, committing to purchase 6.75 million metric tons of carbon removal over the life of the contract. That deal is one of the largest CDR purchase agreements on record and signals where corporate climate strategy is heading.

Microsoft has been on a buying spree for carbon removal since 2020, part of their commitment to become carbon neutral by 2030. Other tech giants are following similar paths, creating real demand for high-quality, permanent carbon removal. This isn't about offsetting emissions anymore. It's about paying for actual tons of CO2 pulled from the atmosphere and locked away for good.

Why Louisiana's Geology Matters

Louisiana isn't just convenient for this project. The state's geological structure is uniquely suited for permanent CO2 storage. Louisiana State University Professor Richard Hughes explained it clearly: millennia of interaction between rivers and the Gulf of Mexico created thick sand layers covered by impermeable shale. These layers act like natural vaults, trapping CO2 underground with minimal risk of leakage.

The geology stacks up like this:

• Deep sand formations stretch from nearly 20,000 feet depth to close to the surface, providing massive storage capacity
• Shale cap rocks create natural barriers that prevent upward migration of stored CO2
• Multiple storage layers allow for flexible injection strategies and backup containment

This geological advantage is why Louisiana is seeing more than $20 billion in proposed CCS investment across the state, according to Will Green, president and CEO of the Louisiana Association of Business and Industry.

>> In Other News: Introducing Early Access to the Upgraded CDR.fyi Portal

Louisiana's EPA Primacy Advantage

Louisiana is one of only five states with EPA primacy for Class VI wells, the designation for underground injection sites used in carbon storage. Joining North Dakota, Wyoming, West Virginia, and Arizona, Louisiana now handles day-to-day permitting, compliance monitoring, and enforcement for CCS projects within its borders. This matters because it streamlines the approval process while maintaining federal environmental safeguards.

Louisiana's primacy brings several advantages:

1. Faster permitting timelines. State agencies with local expertise can process applications more efficiently than federal reviewers handling requests from across the country.
2. Better coordination. Louisiana's Department of Natural Resources can align Class VI permits with other state environmental and industrial regulations, reducing bureaucratic friction.
3. Local accountability. State regulators are more accessible to communities and companies, making oversight more responsive to regional concerns.

The Louisiana legislature built this framework through multiple bills passed during the 2024 and 2025 sessions. These laws clarified eminent domain for CO2 pipelines, protected landowners from liability, established regulatory frameworks, and added restrictions responding to both industry needs and community concerns.

The 45Q Tax Credit Keeps CCS Viable

Economics drive everything in energy, and CCS projects need policy support to compete. The federal 45Q tax credit provides exactly that. Originally established in 2008 and expanded by the Inflation Reduction Act in 2022, 45Q was preserved and in some cases enhanced by President Trump's "One Big Beautiful Bill" signed in July 2025.

The updated credit structure now provides $85 per metric ton for CO2 captured from industrial sources and permanently stored, regardless of whether it's used for enhanced oil recovery or secure geological storage. For direct air capture projects, the credit jumps to $180 per metric ton. These incentives remain available for projects that begin construction before 2033, giving developers a clear runway for planning and financing.

For the AtmosClear project, 45Q credits significantly improve project economics. Capturing 680,000 metric tons annually could generate up to $57.8 million in annual tax credits, making the business case for BECCS far more attractive to investors.

BECCS in the Broader CCS Landscape

The AtmosClear facility represents a specific flavor of carbon capture called bioenergy with carbon capture and storage. Unlike traditional CCS, which captures emissions from fossil fuel combustion or industrial processes, BECCS captures CO2 from burning biomass. Since plants absorb CO2 as they grow, burning them is theoretically carbon neutral. Capture and store that CO2, and the process becomes carbon negative, actually removing greenhouse gases from the atmosphere.

This positions BECCS differently than point-source capture at cement plants or steel mills. Those projects prevent new emissions. BECCS and direct air capture actively reverse past emissions. That's why companies like Microsoft are willing to pay premium prices for CDR credits from projects like AtmosClear.

Technology	CO2 Source	Climate Impact	45Q Credit
Industrial CCS	Fossil fuels, cement, steel	Emission reduction	$85/ton
BECCS	Biomass combustion	Carbon removal	$85/ton
Direct Air Capture	Ambient atmosphere	Carbon removal	$180/ton

Economic Impact and Community Benefits

Beyond climate benefits, this project brings real economic activity to the Baton Rouge region. Fidelis estimates the facility will drive over $800 million in total investment and create 75 permanent jobs plus 600 construction positions. That's significant for an area that's seen industrial volatility in recent years.

The company also highlights how the project will support forestry management jobs hit hard by mill closures across Louisiana. By creating demand for responsibly managed forest products as biomass feedstock, AtmosClear offers a market for materials that might otherwise go unused. This type of circular economy thinking, where waste products become valuable inputs, is becoming more common in clean energy development.

Construction is slated to begin in 2026, with operations starting in 2029. That timeline aligns with Microsoft's carbon removal needs and gives ExxonMobil time to finalize permitting for injection wells currently under review.

What This Signals for Carbon Markets

The AtmosClear-ExxonMobil partnership shows how carbon removal is maturing from niche demonstration projects into commercial-scale infrastructure. When major corporations sign billion-dollar, multi-year agreements for CDR credits, it validates the technology and creates precedent for future deals. It also shows how different players bring complementary strengths: Fidelis brings innovation in BECCS technology, ExxonMobil provides proven CCS infrastructure, and Microsoft creates demand through corporate climate commitments.

Louisiana's geological advantages, regulatory framework, and industrial expertise position the state as a national hub for CCS deployment. With over $20 billion in proposed investment statewide, the infrastructure buildout happening now could define carbon management for decades. Other regions with similar geology, particularly along the Gulf Coast and in the Midwest, are watching Louisiana's approach closely.

The path forward for decarbonization isn't just about replacing fossil fuels with renewables. It requires actively removing legacy emissions through technologies like BECCS and direct air capture. Projects like AtmosClear demonstrate that this vision is becoming operational reality, backed by federal incentives, state support, corporate demand, and proven geological storage. That combination might finally give carbon removal the scale it needs to make a real climate impact.