California Commits $11 Million to Advance Direct Air Capture Demonstration Projects

California is putting real money behind direct air capture, and this time it's pushing past the lab-stage work to fund projects that operate under actual field conditions.

The California Energy Commission (CEC) has launched a new funding solicitation under its Carbon Removal Innovation Support Program (CRISP), making up to $11 million available for two to four pre-commercial DAC demonstration projects. Individual awards range from $2.5 million to $5.5 million, with applications due by July 31, 2026.

>> In Other News: Bayer And bp Form Strategic Alliance To Jointly Scale Camelina As Intermediate Crop For Biofuels

To qualify, projects must operate above Technology Readiness Level 6, meaning only relatively mature systems can apply. Applicants also need to bring at least 20% in match funding, which means private capital shares the risk alongside the public investment. At least 7% of CEC funds must go toward community engagement, outreach, and education, and every proposal must include a host community partner with a plan for sustained local involvement.

The performance benchmarks are specific. Projects must hit a capture cost of no more than $450 per metric ton of CO2, keep energy consumption at or below 1,400 kilowatt-hours per metric ton, and achieve a net removal capacity of at least 500 metric tons of CO2 per year. A pre-application workshop is scheduled for May 21, 2026, where interested parties can get more details before the questions deadline on May 29.

Why community buy-in matters now

What's different about this solicitation isn't just the funding amount. The CEC is treating community engagement not as a box to check, but as a core part of what makes a project eligible in the first place. That matters because DAC infrastructure has historically struggled to earn local trust, and projects without it often stall.

By requiring dedicated engagement funding and a formal host community partner, the program signals that technical viability alone isn't enough to get built.

California's existing DAC landscape

California's DAC activity is still early-stage. The state has roughly four to six projects at pilot, demonstration, or early operational status. The most visible is Heirloom's facility in Tracy, California, which became the first commercial DAC plant in the US when it opened in late 2023. It captures up to 1,000 tons of CO2 per year using a limestone-based process, with the captured carbon stored in concrete through a partnership with CarbonCure Technologies.

Other California efforts include the California DAC Hub consortium backed by the US Department of Energy, and Southern San Joaquin Valley hub concept studies led by Lawrence Berkeley National Laboratory.

Most of this activity remains in testing and pre-commercial stages. The CEC's new funding round is designed to push some of these projects closer to the validation and operational data that the sector still needs badly.

Federal funding protection adds momentum

The timing of this announcement matters. It follows the Trump administration's decision earlier this year to preserve federal funding for major US DAC and hydrogen hub projects, including multibillion-dollar programs in Texas and Louisiana that had been at risk. That federal commitment gave states like California a clearer runway to build on, rather than stepping in to backstop projects that lost support from Washington.

Together, the federal stability and California's new state-level funding make this an unusually active period for DAC in North America, even as the technology is still finding its cost footing.