With a new funding opportunity, DOE is offering $100M to CDR pilot projects
Scaling carbon removal means supporting solutions at their earliest stages
by Sasha Stashwick, director of policy and Kajsa Hendrickson, deputy director of policy
Last week, the Department of Energy (DOE) took another step towards realizing its ambitious Carbon Negative Shot initiative, the coordinated federal effort that aims to bring carbon removal solutions to gigaton scale. In support of innovation needed across the carbon removal field, the agency offered up $100 million in prizes for research, development, and demonstration (RD&D) projects spanning a range of carbon removal solutions. Eligible projects include a variety of long-duration approaches that DOE believes have the potential to verifiably remove CO2 at scale with a target cost of $100 per metric ton within the next decade.
Below we’ll recap the details of the announcement, the pieces that look promising, and how this funding could have far-reaching implications.
Across key considerations, this FOA charts a promising course
First and foremost, it’s clear that DOE is embracing four principles that we believe are essential to creating a high-quality carbon removal field:
- Adopt a portfolio approach to CDR practices and technologies.
- Pull multiple policy levers to bring new approaches out of the lab and into the real world.
- Center accountability by focusing on strong monitoring, reporting, and verification.
- Demonstrate meaningful social benefits.
DOE is making good on ambitions set when it initially announced these pilot projects last summer. The agency is committing to RD&D in support of a portfolio of novel carbon removal pathways at various levels of technology readiness, an investment that will serve as a foundational building block as we grow the US’s ability to scale CDR to the levels we’ll need in the future. This funding opportunity announcement (FOA) prioritizes and reinforces the role of pilot and demonstration-scale project funding for nascent technologies with the potential to deliver highly durable and verifiable carbon removal solutions. DOE also telegraphs throughout this FOA that the goal is not just to build a carbon removal sector, but to build it on a foundation of accountability, justice and equity.
A snapshot of the details
According to DOE, the February 12th FOA is the first of several in the coming years. This FOA offers funding for 80% of project costs across three areas of interest:
- $35M for up to five small biomass carbon removal and storage (BiCRS) pilots (up to $7M per project);
- $40M for up to 10 small carbon mineralization pilots (up to $4M per project); and
- $25M for up to five multi-pathway carbon removal testbed facilities (up to $5M per project).
The agency also indicated that additional funding for ocean carbon removal pilot projects would likely be coming soon.
Support for collaboration and projects grounded in local benefits
A learning by doing approach
We were interested to see the upfront solicitation of applications for multipathway testbed facilities. Done right, this approach will help both the field and DOE conceptualize what such projects could look like, and support “learning by doing,” generating valuable information and insights about the potential for flexibility in designing projects in ways that are responsive to local community interests (which may cut across multiple carbon removal approaches). That said, it’s possible that opportunities to embed carbon removal alongside existing industries, processes, and infrastructure (think agriculture, mining, and manufacturing) could be as or more beneficial than clustering various CDR approaches together. We’ll continue observing developments in this area.
Where community benefits plans show up
The FOA requires that applicants for BiCRS and mineralization project funding submit a description of the proposed process for developing a community benefits plan (CBP), and include specific elements that are spelled out in DOE’s CBP guidance within the FOA. Applicants for testbed facility funding must go further and submit an actual plan in accordance with that guidance.
Requirements around community engagement are an important inclusion even for projects as early stage as these. We’ve said it before and we’ll say it again: For any of these efforts to be successful long term, projects must demonstrate sustained benefits to local communities and be shaped by those community voices from the get-go. Of note, the FOA requiring energy equity and workforce development in CBPs is an important step in aligning the CDR industry with the just energy transition.
Considerations around timing and ecosystem impacts
Creating conditions for success
After reviewing the FOA, we came away with some concerns about the proposed timeline and whether it allows sufficient space to meet funding requirements. For example, we know from our work on the Regional DAC Hubs program — another Carbon Negative Shot initiative — that in the year since the DAC Hubs FOA was published, applicants, national and local EJ advocates, community-based groups, ENGOs, and other program observers have commented on the fast-paced timeline and deadlines to complete meaningful engagement. Public engagement requires dedicated funding and space for two-way dialogue. While moving quickly on climate projects is a priority, DOE should strive to build in lead time for milestones in all FOAs that factors in resource-intensive educational and input processes.
More safeguards needed in the BiCRS lane
Deeper in the weeds, we commend DOE’s interest in evaluating not just the efficacy of applicant projects in removing and storing carbon, but also how a CDR project will impact natural systems, biodiversity, water consumption, land use, and food security. However, with diverse categories of potentially eligible CDR pathways, we know the devil will be in the details, and we did spot some areas of concern.
As DOE considers which projects to select for this funding, we urge the agency to apply rigorous safeguards to its list of BiCRS feedstocks, prioritizing those that are demonstrated to be low-carbon and broadly sustainable and avoiding others, like wood pellets, that have been shown to be high-risk for communities, the climate, and forest ecosystems.
Further, this RD&D initiative is squarely meant to catalyze innovation, so we were surprised to see the inclusion of BiCRS pathways that rely on large-scale combustion of biomass for electricity, as it is a mature technology with little scope for further innovation or cost reductions.
Also of note is the inclusion of biomass burial. DOE recently invested in a two-day workshop to explore this novel approach, and we’ll be watching to see if their FOA creates opportunities for biomass burial to remove carbon at scale.
From the Carbon Negative Shot, more still to come
News out of the Carbon Negative Shot is far from over, and we’re continuing to watch this space as updates about the finalized first round awards for the DAC Hubs program are expected soon.
Unlike the R&D and pilot project funding announced last week, the DAC Hubs program is focused on first-of-a-kind commercial scale DAC projects that depend on taxpayer support. Knowing more about where funds are headed will be essential to building public buy-in, so we’re hoping to soon learn additional details about where hubs will be located, energy sources and storage methods, and other involved stakeholders. Greater transparency and information sharing will help maximize learnings across the program and be critical to demonstrating the public value of this important program.
This FOA, alongside DOE’s CDR procurement pilot and the DAC Hubs program, shows that the Carbon Negative Shot is on a promising path to continue supporting an integrated, holistic approach to scaling carbon removal with end-to-end support for innovation.
Edited by Emily Reich
We’ll share analysis and updates of the Carbon Negative Shot in our newsletters and on Twitter.
