How Congress funded carbon removal in FY23 appropriations
by Vanessa Suarez, senior policy advisor and Alyson Lee, senior government affairs advisor
2022 was another invigorating year for carbon dioxide removal (CDR), with historic milestones like the passage of the biggest federal climate deal in history and over $1 billion authorized for carbon removal research, development, and demonstration (RD&D). Congress closed out this monumental year with a massive $1.7 trillion omnibus agreement, including $154.1 million* in annual appropriations for carbon removal. In line with Carbon180’s fiscal year 2023 (FY23) recommendations, these funds support critical priorities for advancing carbon removal including agricultural research, tree nurseries, geologic carbon storage permitting, and more. A couple of new bills were also included in this year’s spending package, including the Growing Climate Solutions Act (reinforcing the importance of advancing soil carbon research) and the SUSTAINS Act (offering private companies the opportunity to contribute funds to federal conservation programs).
We combed through the bill and compiled all the details on carbon removal below. Read on for our breakdown of how carbon removal funding in the FY23 appropriations package is getting distributed.
*Some funding included in this bill was dedicated to multiple technologies in a lump sum. For ease, we’ve divided that funding equally in our analysis.
Energy & Water bill
This year’s Energy & Water (E&W) bill appropriated $140 million for coordinated RD&D and large-scale commercialization of diverse carbon removal technologies across the Department of Energy (DOE) — a slight decrease from last year’s $179 million. At the Office of Fossil Energy and Carbon Management (FECM), the CDR program received $70 million, a 40% increase from FY22, including up to $15 million for RD&D of ocean carbon removal. Additionally, the Office of Energy Efficiency and Renewable Energy received $20 million and the Office of Science received $50 million for CDR RD&D.
Congress also provided strong funding for tools that can help enable technological carbon removal. FECM’s Carbon Utilization program received $50 million for RD&D of carbon dioxide conversion into high-value products like chemicals and building materials. The Carbon Transport and Storage program received $110 million to support surveys and site characterizations of promising ocean-based geologic formations, among other priorities. The Office of Economic Impact and Diversity, leading the implementation of the Biden Administration’s Justice40 initiative and ensuring disadvantaged communities have a voice in how we deploy carbon removal technologies, was funded at $34.14 million.
In addition to funding carbon removal innovation, Congress directed DOE to establish a first-of-its-kind competitive pilot program for purchasing carbon removal projects. (We’re pretty excited about this one over at Carbon180, since we believe that federal procurement of carbon removal is necessary to reach gigaton scale, establish high standards around durability and labor, and ensure necessary safeguards for communities.)
In line with our Soil Carbon Moonshot, a plan for ambitious federal action to pursue groundbreaking soil carbon research, Congress increased funding for a number of critical research programs in the Agriculture spending bill. The Agricultural Research Service’s Salaries and Expenses subaccount received $1.7 billion, including increases to the Long-Term Agroecosystem Research (LTAR) Network, Climate Hubs, National Soil Dynamics Lab, and Agricultural Measurement and Monitoring Innovation Lab — programs, networks, and initiatives all critical to improving soil carbon research and developing soil carbon sampling protocols and measurement tools. The farmer-led Sustainable Agriculture Research and Education program received $50 million, an 11% increase from last year and a big step closer to the program’s $60 million authorization, which will make more grants and education opportunities available to farmers and ranchers. The Agriculture and Food Research Initiative received $455 million, a 2% increase from FY22. Finally, the Economic Research Service was funded at $92.6 million and directed to submit a report to the Appropriations Committees on voluntary carbon sequestration incentives for various biobased products.
Under the Conservation Operations account, the Conservation Technical Assistance program received a small increase from last year totaling $801 million, with $1 million carved out for climate-smart agriculture. Congress also encouraged the Department of Agriculture (USDA) to develop guidance for the Environmental Quality Incentives Program (EQIP) using a collaborative approach, ensuring input from local communities through listening sessions with land-grant universities and acequias. Unfortunately, the final omnibus bill did not include the $50 million for Equity Conservation Cooperation Agreements proposed by the House, missing an opportunity to expand the delivery of conservation assistance to historically underserved producers.
Interior & Environment bill
The Interior and Environment bill included exciting investments and provisions related to carbon removal across forestry, carbon mineralization, and geologic storage. At the US Forest Service, the Forest and Rangeland Research account received $307 million, with $32.2 million for the Forest Inventory and Analysis program, a 45% increase from last year. A number of different priorities received a piece of this funding, including $2 million for collaborative research on forest carbon, as well as $2 million for academic partnerships to advance forest biomass remote sensing technologies and methodologies. The Vegetation and Watershed Management program received $32 million, a small increase from FY22, to establish and expand federal nurseries and seed extractories, as well as research and develop more climate-resilient seeds. Other priority programs for conserving, restoring, and increasing the resilience of US forests also received increased funding, including Forest Health Management ($32 million), Urban and Community Forestry ($40 million), and Community Forest and Open Space Conservation ($6 million).
In support of technological carbon removal, the Interior bill included $6.2 million for Class VI wells at the Environmental Protection Agency’s Underground Injection Control program (a 24% increase from FY22) to develop internal expertise and capacity, and support education and training programs for states. These funds are critical as Class VI well permit applications for geologic carbon sequestration continue to grow, with 35 permits currently pending or active as a result of increasing federal support for carbon management projects in the Infrastructure Investment and Jobs Act. Furthermore, the Interior bill provides $2 million to the Department of the Interior’s Bureau of Ocean Energy Management for geologic carbon sequestration on the Outer Continental Shelf, as well as $650,000 to the US Geological Survey (USGS) for biologic carbon sequestration and almost $3 million for geologic carbon sequestration and carbon mineralization efforts.
Defense and Commerce bills
In addition to robust support at DOE and USDA, Congress continued to appropriate funds for carbon removal at the Department of Defense (DOD) and Department of Commerce (DOC). Similar to previous years and in line with the SEA FUEL Act of 2019, DOD received $10 million for RD&D of direct air capture and ocean carbon removal. Congress also directed DOC’s National Institute of Standards and Technology to expand its carbon removal research to include the development of standard reference materials and testing procedures for direct air capture, and to support carbonate materials development, testing, and certification for construction markets. At DOC’s National Oceanic and Atmospheric Administration, the National Oceanographic Partnership Program was directed to work with other federal agencies to develop, test, and evaluate ocean carbon removal technologies.
Annual appropriations bring new opportunities each fiscal year for Congress to support entrepreneurs, scientists, developers, communities, and producers by funding innovative programs working to address the climate crisis and remove legacy carbon from our atmosphere. The FY23 omnibus saw Congress build on previous funding levels, fill gaps from the historic climate and infrastructure packages, and continue investing significantly in carbon removal. We’re looking forward to both the upcoming release of the President’s 2024 Budget Request and to continue our work with Congress on FY24 appropriations. Keep an eye out for our FY24 recommendations coming in early spring.
Edited by Emily Reich