US Energy Department grants $1.2 billion to two direct air capture projects

The US Department of Energy selected projects from Occidental's 1PointFive and Climeworks for grants up to USD 1.2 billion to build direct air capture facilities. The award, the largest-ever in engineered carbon removal, signals scaling momentum that Indian firms pursuing carbon removal and net-zero pathways should track.

The U.S. Department of Energy selected two carbon removal initiatives, one from Occidental's 1PointFive and one from Climeworks, for grants up to $1.2 billion to develop Direct Air Capture (DAC) facilities. The projects, the largest-ever investment in engineered carbon removal, could collectively remove over 2 million metric tons of CO2 annually, exceeding the current largest DAC facility by more than 250 times. The IEA identifies DAC as crucial for net-zero, and the IPCC notes 1.5°C scenarios require carbon dioxide removal potentially reaching billions of tons annually.

The selected projects are the Project Cypress DAC Hub in Louisiana, a collaboration between Climeworks, Battelle and Heirloom, and the South Texas DAC Hub by 1PointFive with partners Carbon Engineering and Worley. These projects affect the emerging carbon removal industry, technology developers and corporate buyers seeking permanent CO2 removal. The DOE states the funding will provide insights for future public and private investment, effectively kickstarting a new industry crucial for tackling the climate crisis at scale.

Indian companies and policymakers tracking carbon removal markets, net-zero strategies and engineered CDR should monitor these hubs as they enter award negotiations with the DOE's Office of Clean Energy Demonstrations (OCED). Funding will support planning, design, environmental permitting and long-lead equipment procurement. Stakeholders evaluating carbon credit supply, removal cost curves and technology maturity should watch whether these facilities validate DAC's commercial scalability, given each project's capacity exceeds today's largest operating facility by over 250 times.

Key figure — Grant amount: up to $1.2 billion for two DAC projects