Key Impact Points:
- Potential loss of over $1 billion in funding threatens two major carbon removal hubs.
- Projects crucial for removing over 2 million metric tons of CO₂ annually risk collapse.
- Decision aligns with budget shifts toward tax cuts under Trump administration review.
Funding at Risk for Major Carbon Capture Hubs
The U.S. Department of Energy (DOE) is considering cutting hundreds of millions of dollars in grants to major carbon capture hubs in Texas and Louisiana, according to anonymous sources familiar with the matter.
These Direct Air Capture (DAC) hubs were a centerpiece of former President Joe Biden’s strategy to significantly reduce greenhouse gas emissions. Operated by prominent firms like Battelle, Climeworks, Heirloom Carbon Technologies, Occidental Petroleum’s subsidiary 1PointFive, Carbon Engineering, and Worley, the hubs represent the largest effort in the U.S. to commercialize carbon removal technology.
At full capacity, the two hubs combined could remove more than 2 million metric tons of carbon emissions annually, significantly surpassing the output of the world’s current largest DAC facility in Iceland.
Budget Review Puts Projects in Jeopardy
The proposed cuts are part of a broader move under the Trump administration’s priorities to fund tax reductions through Congress’s budget reconciliation bill. Energy Secretary Chris Wright is reviewing the list of targeted Biden-era programs for elimination.
An Energy Department spokesperson stated:
“This review is ongoing, and speculation by anonymous sources about the results of the review are just that – speculation.”
However, the financial reality remains stark—without continuation of their promised grants, both projects, awarded $550 million and $500 million respectively under Biden but receiving just $50 million each so far, face imminent collapse.
Urgent Action Called for by Local Authorities
Louisiana state officials have intensified lobbying efforts. In a letter viewed by Reuters, Susan Bonnett Bourgeois, Louisiana’s Secretary for Economic Development, urgently wrote to the state’s congressional representatives:
“I urge you to contact DOE Secretary Chris Wright and ask him to take every necessary step to advance this critically needed federal grant.”
Occidental Petroleum, behind the Texas hub, did not directly comment on the potential funding cuts but previously acknowledged discussions with President Trump on the importance of DAC technologies and related subsidies.
Small DAC Projects’ Future Uncertain
Approximately 20 smaller DAC research initiatives, also identified by Biden’s administration for federal funding, were not targeted in the current review, but their ultimate status remains unclear, according to the sources.
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