Biden administration releases $2.5 B for carbon capture programs
The Biden-Harris Administration, through the U.S. Department of Energy (DOE), announced $2.52 B in funding for two carbon management programs to catalyze investments in transformative carbon capture systems and carbon transport and storage technologies. Funded by President Biden’s Bipartisan Infrastructure Law, the two programs—carbon capture large-scale pilot and carbon capture demonstration projects program—aim to significantly reduce carbon dioxide (CO2) emissions from electricity generation and hard-to-abate industrial operations, an effort critical to addressing the climate crisis and meeting the President’s goal of a net-zero emissions economy by 2050.
The new programs will help accelerate the demonstration and deployment of carbon management technologies, supporting the Biden-Harris Administration’s efforts to create good-paying manufacturing jobs, reduce pollution to deliver healthier communities, and reinforce America’s global competitiveness in the clean energy technologies of the future.
“Drastically cutting emissions across our economy through next-generation carbon management technologies is a critical component of President Biden’s strategy to combat the climate crisis and achieve our ambitious clean energy goals,” said U.S. Secretary of Energy Jennifer M. Granholm. “By focusing on some of the most challenging, carbon intensive sectors and heavy industrial processes, today’s investment will ensure America is on a path to reach net-zero emissions by 2050 and at the forefront of the global clean energy revolution.”
The electricity generation and industrial sectors account for a large portion of U.S. carbon emissions. Successfully scaling carbon management technology—especially in hard to decarbonize sectors and heavy industries such as steel and cement production— is a key component of President Biden’s plan to combat the climate crisis and achieve a net-zero carbon economy by 2050. In addition to reducing harmful greenhouse gas emissions, these technologies will also help deliver clean air and other environmental benefits to communities across the country while revitalizing local economies.
The two funding opportunity announcements released today are:
- Carbon Capture Large-Scale Pilots: This funding opportunity includes up to $820 million for up to 10 projects focused on de-risking transformational carbon capture technologies and catalyzing significant follow-on investments for commercial-scale demonstrations on carbon emission sources across the power and industrial sectors. New carbon capture technologies are emerging from the past two decades of research and development and the next step is testing them at larger scales to help attract the capital necessary for their demonstration and deployment. Funding for this program will provide the support needed to test these novel technologies under relevant conditions in both the power and industrial sectors.
- Carbon Capture Demonstration Projects Program: This funding opportunity includes up to $1.7 billion for approximately six projects to demonstrate commercial-scale carbon capture technologies integrated with CO2 transportation and geologic storage infrastructure. This program focuses on funding demonstration projects that can be readily replicated and deployed at power plants and major industrial sources of carbon emissions, such as cement, pulp and paper, iron, and steel.
The Office of Clean Energy Demonstrations, in collaboration with the Office of Fossil Energy and Carbon Management and the National Energy Technology Laborator, manages these programs and is charged with accelerating deployment of carbon management technologies by de-risking these transformational technologies at scale and catalyzing private sector investment through public-private cost share agreements.
In addition to the funding provided today, other complementary Bipartisan Infrastructure Law efforts such as the Carbon Storage Assurance Facility Enterprise and the Carbon Dioxide Transportation Infrastructure Financing and Innovation Act programs will further accelerate commercialization of carbon management through infrastructure and geologic storage site development. President Biden’s Inflation Reduction Act features substantial improvements to the federal Section 45Q tax credit for the capture and geologic storage of CO2, which provides additional incentives to help enable wide-scale project deployment.
Successful applicants for these pilots and demonstrations must illustrate meaningful engagement with and tangible benefits to the communities in which these projects will be located. Applicants for funding will be required to submit Community Benefits Plans as a scored part of their applications to the program. These plans, now included across most DOE funding opportunities, require applicants to detail their commitments to community and labor engagement, quality job creation, diversity, equity, inclusion, and accessibility, and benefits to disadvantaged communities as part of the Justice40 Initiative. Projects selected under these opportunities will be required to develop and implement strategies to ensure strong community and worker benefits, and report on such activities and outcomes.
Read the full funding opportunity announcement for the Carbon Capture Large-Scale Pilots here. Read the full funding opportunity announcement for the Carbon Capture Demonstration Projects Program here.
DOE may issue additional funding opportunities for these programs in the future. DOE anticipates issuing a third carbon capture demonstrations funding opportunity for projects that are still performing front-end engineering design studies.