Everything you need to know about federal funding for carbon removal

Big money and big CDR wins

By Erin Burns, director of policy and Vanessa Suarez, policy advisor

Scaling carbon removal solutions to meet the climate challenge will require significant federal funding for research, demonstration, and deployment (RD&D) over at least the next decade. Until recently, carbon removal had received almost no federal support. Starting with fiscal year 2020 (FY20) federal appropriations and on the heels of the National Academies report, Congress recognized this need and began seriously ramping up funding for carbon removal solutions. That trend continued this year with the recently dropped House appropriations bills, which include more money than ever before for carbon removal. The House bills would increase funding for a suite of tech- and land-based carbon removal solutions, from RD&D for cutting-edge carbontech applications to increased awareness and outreach of the Environmental Quality Incentives Program (EQIP), a key federal program for scaling soil health.

Here’s what has happened on federal carbon removal funding to date, key takeaways from the FY21 House appropriations bills, and why we’re optimistic that Congress will continue to take big actions to scale natural and technological solutions.

Quick history of federal funding for carbon removal

To understand the importance of the FY21 appropriations bill, let’s talk a bit about how little federal attention and support has been given to carbon removal until very recently. The FY20 appropriations package, passed at the end of last year, included historic levels of funding for negative emissions technologies (NETs). At the Department of Energy (DOE), we saw $60 million allocated for negative emissions technologies, $35 million of which were for direct air capture (DAC). And the DOE already put out a carbon removal funding opportunity earlier this year, with $22 million for research efforts that “span the spectrum from fundamental research in materials and chemical sciences to field testing of prototypes.”

Beyond DOE funding for negative emissions, Congress allocated $8 million for work on DAC and ocean capture at the Department of Defense (DOD). This funding supports the work outlined in the SEA FUEL Act, a bipartisan, bicameral bill enacted at the end of 2019. And it’s not the only thing happening in this space at DOD — Opus 12, a carbontech company, has partnered with the Air Force to work on creating jet fuel from carbon dioxide captured from the air. Before FY20, Congress had appropriated only about $11.5 million to DAC — ever.

There was also $21 million for carbontech and other forms of carbon use, up from $12 million the previous year. Carbontech represents a huge economic opportunity, with a $1 trillion total available domestic market, but it’s still a pretty nascent field, so this funding is especially important. Already this year, 11 projects within the Carbon Use program at DOE have received $17 million for R&D of carbon utilization.

A new era of Congressional victories

Over the past couple of weeks, the FY21 House appropriations bills have been released and we’re seeing even bigger wins for carbon removal.

House Energy and Water Appropriations

The House Energy and Water (E&W) FY21 appropriations bill includes serious amounts of funding for technological carbon removal. Under this bill, DOE would receive $95 million for RD&D on negative emissions technologies, a $35 million increase from the year prior. Within those $95 million, $40 million is specifically dedicated to DAC, a $5 million increase. There’s also a whopping $239.5 million within additional relief provisions for demonstrations of negative emissions technologies. Along with these funding increases, the bill also requires DOE to create a coordinated program across the Office of Energy Efficiency and Renewable Energy, the Office of Fossil Energy, and the Office of Science for RD&D into negative emissions technologies. This was included last year, but didn’t happen.

Both the ambitious funding levels and the report language focused on coordination in the House E&W appropriations bill continue to reflect many of the recommendations fleshed out by the National Academies report and the New Carbon Economy Consortium’s innovation plan, and are items for which we’ve advocated for years. These are huge steps towards addressing key carbon removal needs and scaling technological carbon removal and, particularly when taken alongside the introduction of bills like the CREATE Act, it’s clear that the inter- and intra-agency coordination that we’ve been championing is a real priority on the Hill.

House Agriculture Appropriations

It’s not just negative emissions technologies that are getting support on the Hill — the FY21 House Agriculture appropriations bill includes funding for six programs whose work includes soil health and soil carbon:

  • Conservation Technical Assistance
  • Soil Surveys Program
  • Agriculture and Food Research Initiative
  • Sustainable Agriculture Research and Education
  • Economic Research Service
  • Agricultural Research Service.

We’re most excited about the report language that supports RD&D, education, and financial incentives for agricultural soil carbon. The subcommittee explicitly highlighted the value of soil carbon storage and its connection to soil health. Why is the language so important? The emphasis placed on scaling soil carbon storage in agricultural lands in this bill is a significant leap from what we’ve seen in previous years, and a strong foundation for future funding. Agricultural lands have significant potential for sequestering carbon while providing co-benefits for producers and the environment.

This appropriations bill also shows that the House shares many of our fundamental beliefs about carbon removal — the bill aligns with many of the priorities laid out in Leading with Soil as well as the National Academies report.

What’s next?

Carbon180 will continue to work to increase federal spending on carbon removal because it’s an essential part of scaling these solutions (we didn’t submit nearly 300 funding and language appropriations requests just for fun). The FY20 enacted levels and what’s in the House FY21 bills are huge wins. The House bills have passed out of their subcommittees and we’ll be watching as they move forward and as the Senate releases their bills.

We’re optimistic. There’s been a wellspring of broad, bipartisan support for carbon removal, from numerous recent bills to the Biden-Sanders plan, and it’s clear that we’re just at the beginning of a massive federal scale up of carbon removal.

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