The notice of intent is a preliminary first step, with further details coming.
by Courtni Holness, policy advisor and Rory Jacobson, deputy director of policy
Last November, Congress shook up the carbon removal field with an unprecedented investment — $3.5 billion to establish the Regional Direct Air Capture Hubs (DAC Hubs) program. Now, the Department of Energy (DOE) is gearing up to issue its first funding opportunity announcement (FOA) for the program, due later this year. And thanks to a recently released notice of intent (NOI), we’ve got a first look at how DOE plans to interpret and implement the statute from Congress.
The notice provides interested applicants with a preliminary look at DOE’s vision for the program, in line with the infrastructure deal’s requirements for eligibility and selection. With that information in mind, potential applicants can begin preparing anticipated application materials. We were glad to see many of the recommendations from our recent white paper incorporated into the document, including requirements for community engagement plans, emphasis on early and rigorous permitting, and the pursuit of high-road labor practices and workforce development. While there were some exciting inclusions in the NOI, this information is preliminary, and details of the notice are subject to change.
Before we dive in…
The infrastructure deal specifically tasks DOE with selecting, funding, and overseeing the development of four hubs each capable of capturing and then storing or utilizing at least one million metric tons of CO2 per year. It also directs the Department to prioritize projects located in economically-distressed and fossil-energy intensive regions and create high-quality job opportunities. Congress’s statute provided high-level guidance but left enough room for DOE to leverage its internal expertise — that’s where the NOI comes in.
It’s worth noting that the NOI is more of an early preview to help applicants get ready for an official FOA. The guidance within the 6-page document is not set in stone (or “mineralized in carbonate” as we say) yet. DOE is still likely to make changes to the guidelines outlined in this NOI. Regardless, between now and then, project developers and potential host regions should collaborate to determine what a functional hub may look like, begin engaging local stakeholders, and develop application materials.
Here’s what stands out
Below are new (and we think noteworthy) insights into DOE’s current strategy for the implementing the hubs program:
The NOI signals that the required materials for FOA submission may look different depending on the applicant’s stage in project development. The FOA is likely to offer two tracks: 1) a standard application timeline for hubs still establishing their teams, sites, and technologies, and 2) an accelerated timeline for projects already working on initial permits and engineering studies.
Eligible and Ineligible Technologies
DOE extends funding eligibility to a broad portfolio of carbon removal pathways, including conventional DAC, biomass carbon removal and storage (BiCRS), direct ocean capture, and enhanced mineralization. The NOI also indicates what falls outside their interpretation of the infrastructure law, namely projects that use captured CO2 for enhanced oil recovery (EOR) and carbon conversion pathways that lack durable storage options.
Applicants are encouraged to coordinate across federal carbon management and clean energy programs, including the Carbon Capture Technology Program, the Carbon Storage Validation and Testing Program, and the Carbon Dioxide Transportation Infrastructure Finance, and Innovation (CIFIA) Program. This coordination helps DOE optimize federal dollars and its capacity to connect DAC hub applicants with developers for geologic storage, renewable energy, and carbon utilization projects.
The NOI indicates that all applicants must provide DOE with their net-zero plans, and specify how their involvement in a proposed hub will support these goals. If carried over in the FOA, this would be the first instance of DOE requiring applicants to elaborate on how proposed funding would support the Department’s internal climate targets.
With the finalized FOA scheduled for late 2022, we’ll be keeping an eye out and look forward to seeing the diverse and strategic technology teams that emerge to meet the demands of this program.
Edited by Tracy Yu