The U.S. Department of Energy (DOE) has announced that it is cancelling $7.56 billion dollars’ worth of awards, which were intended to support 223 climate- and energy-related projects across the country.
As explained in the official announcement, after a thorough, individualized financial review of 321 financial awards, the DOE found that the approved initiatives “did not adequately advance the nation’s energy needs, were not economically viable, and would not provide a positive return on investment of taxpayer dollars.”
The slashed funding applies to awards issued by the Offices of Clean Energy Demonstrations (OCED), Energy Efficiency and Renewable Energy (EERE), Grid Deployment (GDO), Manufacturing and Energy Supply Chains (MESC), Advanced Research Projects Agency-Energy (ARPA-E), and Fossil Energy (FE).
Granted under former U.S. president Biden’s administration, the awards aimed to support large-scale decarbonization and sustainable energy projects, including landmark regional direct air capture (DAC) hubs, carbon capture and storage solutions, and other sustainability-oriented innovations.
While the DOE announcement did not name the projects with cancelled awards, Latitude filled this gap by releasing a complete list of all the initiatives with terminated funding.
Among the affected DAC initiatives are the Aera DAC Hub Kern project, the Colorado (Pueblo) Regional DAC Hub, the Illinois and Florida DAC Hubs, GE Vernova’s award on a regional DAC Hub in Houston, the Midwest Nuclear Direct Air Capture Hub (MINDAC), the California DAC Hub, and the Ankeron DAC Hub Study by the Rocky Mountain Institute (RMI), Pacific Northwest National Laboratory, and Carbfix.
Talking to Carbon Herald, RMI shared that earlier this year, it received an official termination notice from the DOE that confirmed the termination of two awards granted to the institute.
“We have yet to receive an official notice of termination on the third award related to direct air capture,” the RMI source added.
Another company on the list is CarbonCapture Inc., which has been involved in the development of the Northwest Louisiana Regional DAC Hub.
Motivated by budget cuts announced by Trump’s administration earlier this year, the company announced last week that it is moving its Tamarack DAC project from the originally planned site in Arizona to the Deep Sky Alpha facility in Alberta, Canada, where the environment for climate projects is currently more favorable.
Relevant: CarbonCapture Moves DAC Project From The U.S. To Deep Sky Alpha In Canada
While our team did reach out to CarbonCapture for commentary on the DOE announcement, at the time of publishing this article, we have not yet received any response from the company.
The list published by Latitude goes on to include cancelled awards for many other projects that focus on decarbonization of hard-to-abate industries, filtration technologies, and renewable energy.
DOE’s decision has triggered reactions across the climate tech industry, with entities like the Carbon Removal Alliance voicing concerns that moves like this one threaten to push innovators to relocate elsewhere.
Giana Amador, Executive Director of the Carbon Removal Alliance, stated,
“The United States is one of the world’s greatest producers of innovative technologies — that is thanks to our government’s long track record and expertise partnering with cutting-edge researchers and companies. America’s role as a reliable and savvy business partner has helped develop and commercialize nearly every technology we produce today, but cancelling grants to high-quality projects undermines that reputation and threatens to send innovators abroad.”
Amador’s statement, released one day after the DOE announcement, continues, “Last night’s wave of cancellations could result in nearly $50 million in cuts to TA-1 and TA-2 DAC Hubs awardees. These businesses fought hard to use this funding to bring in-demand jobs and economic growth to their communities, and want to deploy their technology right here in the United States.”
One important note is that while many DAC hubs are directly impacted by DOE’s move, the landmark Project Cypress and South Texas DAC Hub are not affected by the cancelled awards.
Read more: DOE Withdraws $3.7B Carbon Capture, Decarbonization Funding
In her statement, Amador goes on to raise another crucial point of view in this situation:
“The carbon removal industry is projected to be worth more than a trillion dollars in the coming decades, according to analysis from McKinsey. A trillion-dollar industry means American growth, jobs, and global leadership, but only if there is a policy environment that encourages innovators to stay in the United States and commercialize their technology here.”
The appetizing economic growth prognosis linked to climate tech advancement has prompted many other geographies around the world to start working on developments in this direction.
While the current U.S. climate landscape builds up uncertainty, other countries like Canada are focused on utilizing natural resources and progressive policies to encourage and foster local climate tech proliferation.
In this rapidly shifting game of U.S. governmental priorities, it remains to be seen whether climate tech companies on the ground will manage to move forward with business agendas even without federal support, or whether they will choose to move operations to other, seemingly more welcoming regions in the world.
