Nearly a week after the US Department of Energy (DOE) cancelled $7.56 billion dollars’ worth of awards for climate- and energy-related projects in the United States, reports have surfaced that the termination wave might also extend to the two largest DAC hubs in the country.
Originally granted awards under former president Biden’s administration, the two projects in question are the South Texas DAC Hub by Occidental Petroleum’s subsidiary 1PointFive, and Project Cypress in Louisiana, a joint initiative between Battelle, Climeworks, and Heirloom.
A list published last week by Latitude showed the 321 financial awards that were cancelled as per DOE’s announcement released on Oct 2, 2025.
At that time, Project Cypress and the South Texas DAC hub were not among the initiatives affected by the terminated awards.
This week, however, a new list emerged that seems to indicate the federal funding for these two projects might be cut as well.
The new DOE-issued list, obtained by MIT Technology Review, reportedly contains the names of the two projects and a column titled “latest status,” where the entry states “terminate” for the ~$50 million awards granted for each project.
The amount “to be terminated” matches the one approved as a first tranche of federal funding allocated to the projects, and it remains unclear whether a cancellation of this first portion means no further funding will be granted to Project Cypress and the South Texas DAC hub.
The original government support for these projects intended to provide each of the two DAC hubs with $500 million or more in total grants as they develop over time.
As climate solutions, the two DAC hubs would serve to pull atmospheric CO2 pollution as a complementary measure to the emissions reductions needed to meet global environmental targets on time and limit planetary warming to no more than 2°C.
Relevant: DOE Considering Funding Cuts For The Two Largest DAC Projects In The US
The hubs would do this through a large-scale deployment of direct air capture technology, praised as an effective tool for tackling atmospheric CO2, but also considered challenging due to its high operational costs and intense energy demand.
In this regard, the DOE funding would provide a solid financial backbone for the deployment of Project Cypress and the South Texas DAC hub, helping the country advance on climate goals and fortify its global leading position in climate innovations, while also unlocking economic growth and thousands of new employment opportunities.
If the funding for these two projects is indeed cancelled, the U.S. could miss out on these benefits, raising questions on the future of the carbon removal field in the country.
The reports of the new DOE list have prompted reactions across the carbon removal industry, with many stakeholders coming out with public commentary.
As highlighted in a publication by the Carbon Business Council, the decision to terminate the funding for Project Cypress and the South Texas DAC hub would translate into a risk exposure for more than 130,000 jobs in the United States, along with paused factories, lost leadership edge, and billions of dollars of missed opportunities.
In a joint statement, Giana Amador of the Carbon Removal Alliance and Ben Rubin of the Carbon Business Council and publisher of the Carbon Herald stated:
“The U.S. DAC Hubs program, with $3.5 billion appropriated by Congress, was set to support the largest carbon removal facilities in the world and were intended to further establish American leadership in the sector. If funding for the TA-3 Hubs is cut, the door will be open for other countries to take up leadership of the industry, and claim the job creation and economic benefits of carbon removal.”
Read more: U.S. DOE Axes $7.6B Worth Of Awards, Affecting 223 Climate-Related Projects
The statement also notes that federal, state, and local leaders have stepped up to the plate to preserve the Hubs, mentioning efforts like a letter to the state’s congressional delegation sent by Louisiana Secretary for Economic Development Susan Bonnett Bourgeois and supportive publications from Governor Jeff Landry and Senator Bill Cassidy.
On behalf of the Carbon Capture Coalition, Executive Director Jessie Stolark commented:
“There are reports that the U.S. Department of Energy (DOE) is considering a third tranche of cancellations of hundreds of previously selected projects. This is in addition to the announced cancellation of more than $7.5 billion in DOE projects last week, with 55 of those projects being relevant to carbon management.
“If true, DOE is poised to cancel yet another set of projects and federal investments ranging from building large-scale DAC and hydrogen hubs, to scaling carbon storage, as well as research and development aimed at novel and cost-effective carbon capture technologies.
“Carbon management technologies are key to building a more reliable, affordable, and sustainable American energy system—one that supports existing industries while doubling down on technology innovation. Thanks to robust bipartisan congressional support, which has underscored the importance of public-private partnerships in energy production, the U.S. has attracted significant investments and local economic development potential through various federal carbon management programs. While other nations, such as China, Canada, and members of the EU, reinforce strategic investments in carbon management technologies, actions like this cede ground in a sector where the U.S. has led the world in developing and deploying technologies for decades.
“Additionally, cancelling projects that were rigorously reviewed and lawfully selected by qualified technical experts sends a bad signal to American businesses and investors. Businesses need certainty and predictability to continue to build in the U.S.—pulling back on these already announced projects erodes confidence in the federal decision-making process. Moreover, it’s increasingly clear that those companies that can provide cleaner materials and energy will come out on top in the 21st-century global marketplace. Simply put, the federal investment in these projects was an investment in our shared energy future and a down payment on the continued growth of our economy.”
While the report of the new DOE funding cancellation list has already made waves across the decarbonization sector, it remains to be seen whether an official announcement will be released to confirm this decision.
