Carbon Removal Hubs Languish as DOE Audits Drag On

Two megaprojects that were awarded more than $1 billion in federal subsidies have stalled under President Donald Trump.

Industrial projects for removing climate pollution from the sky face an uncertain future under President Donald Trump. Alex Brandon/AP

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The world’s largest carbon dioxide removal project was scheduled to break ground in Louisiana in 2025 and begin pulling climate pollution from the sky next year.

But preliminary work on the $1 billion development known as Project Cypress has stalled and the companies collaborating on it have gone quiet amid uncertainty about the status of up to $550 million that the Biden-era Department of Energy awarded to the initiative.

It’s been over 500 days since an update has been posted about the project by direct air capture startups Climeworks and Heirloom Carbon Technology and the scientific nonprofit Battelle. The team’s last announcement came before the November 2024 election of President Donald Trump, who claims global warming is a “hoax” and rejects efforts to address the problem as a “scam.”

Project Cypress is designed to pull 1 million metric tons of planet-warming CO2 from the skies each year and store it permanently underground in the congressional district of House Speaker Mike Johnson.

Occidental Petroleum, which plans to build a similarly massive project with $500 million in DOE funding, has also been tight-lipped about its plans to build a DAC hub in South Texas. The last time company leaders briefed investors on the development was in August 2025, when CEO Vicki Hollub said the company hadn’t yet committed to building it.

Both megaprojects now appear to be in limbo, according to two former Department of Energy officials who oversaw the agency’s direct air capture efforts under Trump and former President Joe Biden. The DOE awards, intended to reduce the financial risks of the first-of-their-kind projects, have been under review by the Trump administration since last May — with no end in sight.

“DOE has not articulated a strategy for the DAC hubs” in the Trump era, said Noah Deich, the agency’s deputy assistant secretary for carbon management during the Biden administration. “The uncertainty leaves industry unable to make confident decisions about how to proceed with their projects.”

DOE didn’t respond to a request for comment.

The companies involved with the hubs are holding out hope for federal funding, even as private support shrinks for carbon dioxide removal and other technologies intended to limit climate change. The total amount of venture capital invested in climate technology dropped by $600 million to $42.2 billion last year, according to the financial data firm PitchBook. It was the fourth year in a row that clean tech investment declined and marked the lowest level of funding since 2020.

The biggest question looming over the projects, according to the two former DOE officials, is how long the companies can afford to wait.

The funding holdup is “not necessarily a death knell for the hubs, but it’s harder on Cypress than South Texas,” said Grant Faber, who served as DOE’s direct air capture hubs program manager until he was fired last March as part of Trump’s purge of probationary employees.

“Project Cypress includes startups that need to demonstrate continuous traction [and] are not profitable yet,” explained Faber, who now works at the carbon removal standards company Absolute Climate. “Occidental is better capitalized, has more project development resources and expertise, and connections to the Trump administration.”

Hollub, Occidental’s chief executive, has dined with and donated to the president. During his most recent presidential campaign, she was one of roughly two dozen oil CEOs who attended an April 2024 dinner at Trump’s Mar-a-Lago resort. Hollub also co-hosted a fundraiser for Trump a month later and Occidental sent $1 million to his inaugural committee, according to Federal Election Commission data.

She repeatedly indicated to investors that Trump wouldn’t block federal support for direct air capture technology.

“I think the election of Trump to become our next president is going to be very positive for our industry, especially for our direct air capture,” Hollub said during an earnings call in late November 2024.

“President Trump knows the business case for this. I’ve had several conversations with him,” she added in a February 2025 earnings call. “People around him understand the need for at least some initial subsidies to help advance this technology.”

Occidental is “progressing design activities for the South Texas Direct Air Capture Hub,” spokesperson William Fitzgerald said in a statement. “We believe DAC technology is vital domestic energy infrastructure that can help strengthen energy security and provide new opportunities for economic growth.”

Climeworks remains “strongly committed to Project Cypress in the US,” spokesperson Tristan Lebleu said in an email. He referred specific questions about the progress of the development to Battelle, which is coordinating the effort.

Battelle didn’t respond to questions. Heirloom declined to comment.

Hubs Have Bipartisan Roots

DOE’s direct air capture hub program was created by the 2021 bipartisan infrastructure law in response to scientific research that determined the world needs to begin building large-scale carbon removal developments while also reducing its reliance on oil, gas and coal to avoid the worst impacts of climate change.

At the time, DAC was the most advanced carbon removal technology. It is also the easiest for measuring its effectiveness at reducing climate pollution because it produces a pure stream of CO2.

The infrastructure law provided $3.5 billion to help fund the creation of four direct air capture hubs that are each capable of removing at least 1 million tons of CO2 from the skies annually. Project Cypress and Occidental’s South Texas development were the first two hubs selected by the agency in August 2023. DOE also provided nearly $100 million in matching funds for 19 other DAC proposals that were at an earlier stage of development.

After Trump returned to office in January 2025, the White House halted all climate-related spending programs — an unprecedented move that several courts later overruled. Then last May, Energy Secretary Chris Wright initiated a sweeping audit of $15 billion of funding approved under Biden, which led to the cancellation of $7.6 billion in agency spending. Nearly half of the direct air capture projects that DOE had selected lost their government backing.

Awards for Project Cypress and the South Texas hub were later included on a leaked DOE cancellation list, which the agency hasn’t acted on. Speaker Johnson and Sen. John Cornyn (R-Texas), who’s facing a competitive reelection race in the fall, have both shrugged off the administration’s threats to pull support for the hubs.

The developments are stuck in suspended animation. The last update from the Project Cypress team was in October 2024, announcing a partnership between Climeworks and the CO2 transportation company CapturePoint Solutions.

What Should Hub Developers Do?

The former DOE officials said there are a few ways the developments could finally move forward.

Lower their ambitions or leave the U.S., suggested Deich, who is now a senior adviser at Carbon180, the climate policy think tank he co-founded before joining the Biden administration.

Companies could rescope their hub plans “with different economics, different scale,” he said.

“Canada has almost as nice a policy framework now as the U.S.,” Deich added, referring to its national and provincial investment tax credits for direct air capture.

Some carbon removal companies have already begun to head north, where the Liberal government of Prime Minister Mark Carney is seen as more favorable to climate action than the U.S.

Days after its $12.5 million award was among the hundreds canceled by DOE, the California-based startup CarbonCapture announced plans in October 2025 to build its first commercial DAC plant in Canada. Last month, the Project Cypress partner Climeworks opened its fir