U.S. Department of Energy (DOE) to Fund $2.52 Billion to Two Carbon Capture Programs

The U.S. Department of Energy’s (DOE) Office of Clean Energy Demonstrations (OCED), in collaboration with the Office of Fossil Energy and Carbon Management (FECM), intends to provide up to $2.52 billion to fund two carbon capture programs needed to reduce carbon emissions from the electricity generation and industrial sectors. Established by President Biden’s Infrastructure Investment and Jobs Act, both the pilot and demonstrations programs will help drive the demonstration and deployment of carbon management technologies critical to addressing the climate crisis and meeting the nation’s goal of net-zero emissions by 2050, while also protecting industrial jobs and boosting job creation in communities across America.

“Carbon capture represents an addressable market of nearly $100 billion by 2030 and $600 billion by 2050 just in the United States,” said Office of Clean Energy Demonstrations Director David Crane. “The nearly $5 billion of carbon capture pilot and demonstration projects that will be directly enabled by these two programs, together with the carbon tax credits authorized in the Inflation Reduction Act, will catalyze the commercial wave essential to a clean energy transition, which ensures safe, affordable, and reliable energy to the American consumer and empowers workers in every pocket of the country.”

Since the electricity generation and industrial sectors account for a significant portion of our nation’s carbon emissions, carbon capture, utilization, and storage (CCUS) is a critical component of reducing emissions and meeting our climate and energy transition goals. For the United States to reach net-zero emissions by 2050, CCUS will need to scale to potentially as much as 100 times today’s levels. Growth of this magnitude represents an exciting technological challenge and an extraordinary economic opportunity.

OCED’s role is to de-risk these transformational technologies and catalyze private sector investment through public-private cost share agreements. The Carbon Capture Large-Scale Pilots program will include up to $820 million for up to 10 projects focused on scaling transformational carbon capture technologies. The Carbon Capture Demonstration Projects Program will include up to $1.7 billion for approximately six projects to demonstrate commercial-scale carbon capture technologies, pipeline transportation, and geologic storage infrastructure. The pilot program seeks to catalyze earlier stage technologies with great potential, while the demonstrations program will focus on technologies that will further commercialization.

DOE understands, and intends to address, the concerns of frontline communities and environmental justice and climate organizations about how CCUS projects may negatively affect those communities, local environmental quality, and the overall climate mitigation efforts if not developed with appropriate safeguards. That is why applications to both funding announcements will require a tailored Community Benefits Plan discussing, among other areas, community and labor engagement; investing in the American workforce; diversity, equity, inclusion, and accessibility; and the Justice40 Initiative. This will enable and advise future activities with the intent of developing community-informed projects to support the cost-effective, efficient, equitable, and environmentally responsible at-scale expansion of CCUS operations to enable industry adoption.

DOE plans to release both funding announcements in late February 2023.