The IRA funding that’s boosting carbon removal

It’s a big federal (climate) deal

Image: Karsten Würth

Transforming the 45Q tax credit

  • More time for construction. The IRA gives projects until 2033 to begin construction, creating a wider window in which the credit can be claimed.
  • Right-sized removal requirements. Today, the largest operating DAC facility removes 4,000 metric tons of CO2 per year. The IRA reduces the qualifying threshold from 100,000 to 1,000 tons of CO2 per year, making the credit accessible to a wider array of startups and providing a revenue stream for smaller projects.
  • Increased credit values. Currently, developers can get a credit of $35 per ton of CO2 sequestered through utilization and $50 for dedicated geologic storage. These credit values could be bumped up to $130 and $180, respectively — provided that developers meet certain labor standards, such as paying workers prevailing wages and offering apprenticeship opportunities.
  • Direct payment to developers. Under the IRA, DAC developers can opt for direct compensation for credits generated in the first five years of operation instead of a reduction in their tax liability, allowing them to claim the full credit value.

Investing in agriculture

  • Environmental Quality Incentives program: $8.45 billion
  • Conservation Innovation Grants On-Farm Trials: $50 million
  • Regional Conservation Partnership program: $4.95 billion
  • Conservation Stewardship program: $3.25 billion
  • Agriculture Conservation Easement program: $1.4 billion
  • Conservation Technical Assistance program: $1 billion
  • Data collection: $300 million
  • Aid to distressed holders of guaranteed and direct loans: $3.1 billion
  • Payments to farmers who experienced discrimination in USDA farm lending programs: $2.2 billion
  • Assistance to underserved farmers, ranchers, and forest landowners: $125 million
  • Funding to organizations that help improve land access for underserved farmers, ranchers, and landowners: $250 million in grants and loans

Protecting forests and natural land

  • Wood Innovation Grants: $100 million
  • National forest system restoration and fuels reduction projects: $2.1 billion
  • Urban and Community Forestry program: $1.5 billion
  • Forest Legacy program: $700 million
  • Funding for underserved landowners to adopt climate mitigation or forest resilience practices: $150 million
  • Funding for underserved and small forest landowners to participate in emerging private markets: $250 million
IRA conservation funding. Note that USDA conservation programs are also accessed by forest landowners.

What’s next



A new breed of climate NGO on a mission to reverse two centuries of carbon emissions. Newsletters 👉

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store

A new breed of climate NGO on a mission to reverse two centuries of carbon emissions. Newsletters 👉