Competition heats up for U.S. direct air capture program

By Carlos Anchondo, Corbin Hiar | 01/30/2023 06:45 AM EST

Interested parties so far include CarbonCapture Inc. of California and Sustaera Inc. of North Carolina, as well as the University of Houston and the University of Michigan.

Artist’s rendering of Project Bison, a 5-megaton carbon removal project in Wyoming.

An artist’s rendering of Project Bison, a 5-megaton carbon removal project in Wyoming. Business Wire

This story was updated at 1:15 p.m. EST.

At least four groups have expressed interest in a new federal program that aims to fight global warming with the use of machines that can suck carbon dioxide from the atmosphere.

Two startups and two universities have signaled that they plan to apply for a piece of $3.5 billion in federal funding that’s available to help build four direct air capture (DAC) facilities in the United States.


Though the technology is still nascent, scientists say direct air capture could become a powerful weapon against climate change. It works by removing carbon dioxide — the main driver of global warming — from the air.

The interested parties include CarbonCapture Inc. of California and Sustaera Inc. of North Carolina, as well as the University of Houston and the University of Michigan in Ann Arbor. Of the groups contacted by E&E News, only CarbonCapture suggested it’s looking to spearhead a bid.

“We certainly will be submitting at least one letter of intent and [will be] probably part of multiple hubs,” Patricia Loria, CarbonCapture’s head of business development, said during a webinar last week.

Last year, the company announced plans to develop a massive DAC facility in Wyoming (Energywire, Sept. 9, 2022). Dubbed Project Bison, the plant is designed to capture up to 5 million tons of CO2 annually.

Other organizations involved with direct air capture — including tech giant Microsoft Corp. and Stanford University — said they are still weighing their options. One of the fledgling industry’s biggest players, Switzerland-based Climeworks AG, declined to comment on its potential DAC hub plans.

The deadline to submit letters of intent to DOE is Feb. 17. Full applications for the program are due by mid-March.

Jump-starting an industry

The new Energy Department program, which aims to create four regional DAC hubs, was authorized by the bipartisan infrastructure bill that President Joe Biden signed into law at the end of 2021.

The broader goal of the five-year initiative is to jump-start the DAC industry, which uses fans, filters and pipes to pull carbon dioxide from the atmosphere and store it underground or in long-lasting products such as cement.

DAC is the most commercially advanced long-term carbon removal technology. But there are currently only 18 facilities operating worldwide, which are collectively capable of capturing less than 10,000 metric tons of CO2 per year, according to an April 2022 report from the International Energy Agency.

To keep global average temperature increases below 1.5 degrees Celsius and avoid the worst impacts of climate change, the world needs to not only rapidly slash emissions but also scale up carbon removal.

Scientists estimate that up to 10 billion tons of CO2 will need to be removed annually from the atmosphere by 2050, a figure that increases to 20 billion tons per year by 2100. For reference, the world emitted almost 39 billion tons in 2021 (Climatewire, June 29, 2022).

DOE set the ground rules for the DAC hub competition late last year (Climatewire, Dec. 14, 2022). Winning bids are eligible for matching funds ranging from $3 million for the earliest-stage efforts to $500 million for shovel-ready proposals.

The agency plans to announce its initial selections by the end of June but won’t share a list of applicants due to the “confidential nature” of the process, a DOE spokesperson said.

Who’s in

Some contenders revealed their involvement anyway.

“We are participating in various DAC hub applications,” said Sudarshan Gupta, a spokesperson for Sustaera. “We are not allowed to share any names as a part of the agreement.”

Aside from working on the proposal, Sustaera is also building a DAC pilot project in Cary, N.C., where it’s headquartered. The facility should be online by early next year, Gupta said. When it’s ready, it will have the capability to remove one ton of CO2 from the atmosphere per day.

The startup’s investors include Bill Gates’ Breakthrough Energy Ventures and the Grantham Trust.

The universities involved in the DAC hub contest were even more circumspect.

Volker Sick, a mechanical engineering professor at the University of Michigan, confirmed “that we are part of a team that will submit to this opportunity” but said he was not “in a position to disclose” the other groups the school is working with or where their hub would be.

Ramanan Krishnamoorti, the University of Houston’s chief energy officer, said “we are working on several of these projects but are unable to discuss because of non-disclosure agreements.”

Still on the sidelines

Other groups were noncommittal about entering the competition, which is likely to shape the future of the DAC industry.

“We are evaluating different ways to inform and accelerate the development of DAC and other durable carbon removal infrastructure in the US and around the world,” Phillip Goodman, who oversees Microsoft’s carbon removal portfolio, said in a statement. “Alongside deep emissions reduction, scaling-up direct air capture is an essential element for our company’s and the world’s transition to a sustainable future.”

Rob Jackson, a professor of earth system science at Stanford, said “we’re considering this but haven’t committed.”

Amy Quick, a spokesperson for the Wyoming Business Council, the state’s economic development agency, said “we have an interdisciplinary team exploring options and will announce more information when it is appropriate.”

Other groups that are widely expected to enter bids aren’t showing their cards.

Occidental Petroleum Corp. declined to comment on its plans.

Still, on the company’s third-quarter earnings call in November, Occidental President and CEO Vicki Hollub said the company plans to “develop several hubs along the U.S. Gulf Coast, where we will have the option to develop direct air capture, provide point source capture and sequestration for industrial emissions, or offer both solutions.”

A subsidiary of the oil producer began construction last year on a DAC facility near Odessa, Texas, intended to remove 500,000 tons of CO2 annually (Energywire, Aug. 26, 2022).

Heirloom Carbon, another DAC startup, also declined to comment. In December, the company sent a tweet praising the subsidies that U.S. policymakers are providing for “DAC hubs to help build a just and responsible CDR industry. Now — let’s build the thing.”

And Climeworks, a Swiss DAC pioneer that’s staffing up in the United States, declined to comment on whether it will take part in the competition (Climatewire, Jan. 9).

At the same time, Climeworks revealed that it is “reviewing several projects and sites across the U.S. that are highly suitable for developing large-scale direct air capture and storage projects,” Christoph Beuttler, the startup’s policy chief, said in a statement after this story was published. “A major focus area for Climeworks in the coming months will be engaging with local communities together with project partners,” a process that he said was “key to having a successful project.”

In 2021, Climeworks built the world’s first commercial DAC facility, known as Orca. The plant, which is currently the world’s largest, is capable of removing 4,000 tons of carbon annually (Climatewire, Sept. 7, 2021).

This story also appears in Energywire.