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August 11, 2023
By
Valerie Volcovici
US awards $1.2 billion to Oxy,
Climeworks-led carbon air capture hubs
![](images/images_08_11_2023/pic2%20copy.jpg)
A view of a computer-rendered image of Climeworks'
Mammoth direct air capture plant, is seen in this undated handout
picture obtained by Reuters June 28, 2022. Climeworks/Handout via
REUTERS/File photo
WASHINGTON, Aug 11
(Reuters) - The U.S. Department of Energy on Friday announced that
projects in Texas and Louisiana to remove more than 2 million metric
tons of carbon emissions per year will get over $1 billion in federal
grants, a key step in scaling up direct air capture
(DAC) technology.
The Department of Energy
(DOE) selected Project
Cypress in Louisiana, run by Battelle,
Climeworks Corporation and Heirloom Carbon Technologies, Inc.; and the South
Texas DAC Hub in Kleberg County,
Texas, proposed by Occidental Petroleum's (Oxy) (OXY.N) subsidiary
1PointFive and partners Carbon Engineering Ltd. and Worley.
The agency also launched several new initiatives
aimed at bringing the cost of the technology down to less than $100
per net metric ton of CO2-equivalent within this decade. That includes
a $35 million government procurement program for carbon removal
credits, and funding for 14 feasibility studies and five engineering
and design studies for earlier-stage hub projects.
Worsening climate change and inadequate efforts
to cut emissions have thrust carbon removal into the spotlight. U.N.
scientists estimate billions of tons of carbon must be sucked out of
the atmosphere annually to keep in line with a global goal to cap
global warming at 1.5 degrees Celsius.
DAC, when deployed at scale, can help the U.S.
meet its goal of neutralizing greenhouse gas emissions by 2050,
according to the DOE.
But the young technology needs to become much
cheaper to deploy at the scale needed to affect the planet.
"If we deploy this at scale, this technology can
help us make serious headway toward our net zero emissions goals while
we are still focused on deploying, deploying, deploying more clean
energy at the same time," Energy Secretary Jennifer Granholm told
reporters.
The grants are the first
made by the Energy Department, which got $3.5 billion from Congress
to invest
in regional DAC hubs from the passage
of the bipartisan infrastructure bill.
Vicki Hollub, CEO of Oxy, told reporters that the
project has the potential to remove up to 30 million tons of CO2 per
year when fully operational and "validates our readiness, technical
maturity, and our ability to use Oxy's expertise in large projects."
The Louisiana project will hire workers displaced
from the fossil fuel industry to fill some of its projected 2,300
jobs.
DAC uses chemical reactions to remove CO2 from
the air, which can then be stored underground or used in products such
as concrete or aviation fuel.
Climeworks said its hub will be built in several
stages with an eventual 1 million tons per year capacity by 2030 and
construction starting as soon as possible.
“It depends on multiple factors but I would wish
to have first capture in 2025/2026,” Jan Wurzbacher, Climeworks
director and founder told Reuters.
He said factors such as the timeline of the
permitting process would be out of the company’s control.
Although most environmental activists acknowledge
that carbon removal will be needed for global climate targets to be
met, they are concerned companies could use carbon removal development
to give fossil fuel companies cover to maintain production, especially
in minority and low-income areas.
The announcement comes just over three months
before the COP28 climate summit, where the host country, the United
Arab Emirates, is expected to focus on the role of carbon removal
technologies such as DAC.
This month, its national oil company ADNOC and
Occidental agreed to evaluate investment opportunities in DAC in the
United States and overseas.
Erin Burns, director of carbon removal advisory
firm Carbon180, said the United States is positioning itself as a
leader in this technology.
"This is the first major federal investment from
any country on carbon removal at this level," Burns said. "The U.S. is
making a very large bet on this technology."
Reporting by Valerie Volcovici, additional reporting by Susanna
Twidale, Editing by Gerry Doyle and Susan Fenton
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