The Department of Energy is targeting the dirtiest and hardest-to-decarbonize electric power and industrial plants with $2.52 billion in funding for “transformative carbon capture systems and carbon transport and storage technologies,” according to an agency announcement on Thursday.
The dollars from the Infrastructure Investment and Jobs Act will go to two programs, both focused on advancing carbon capture technologies that are at or moving toward commercial scale.
The Carbon Capture Demonstration Projects Program will get the lion’s share of the money — $1.7 billion — for approximately six projects that demonstrate commercial-scale, and readily replicable, carbon-capture and sequestration (CCS) projects.
According to the funding announcement, at least two of the projects will be at new or existing coal-fired generation plants. Another two will be sited at new or existing natural gas plants, and the final two at new or existing industrial facilities, such as cement, iron or steel plants.
“Proposed projects must demonstrate as part of the application and during the award at least 90% CO2 capture efficiency over baseline emissions and a path to achieve even greater CO2 capture efficiencies for power and industrial operation,” the announcement says. The awards will come with a 50% cost-share requirement.
Letters of intent for the funding must be received by March 28, with final applications due May 23.
The Carbon-Capture Large-Scale Pilots program will offer a more modest $820 million for 10 projects that will de-risk “transformational carbon capture technologies and [catalyze] significant follow-on investments for commercial-scale demonstrations” in both the electric power and industrial sectors.
The term “large-scale” here means projects that are not yet commercialized but are large enough to validate the technology and “demonstrate the interaction between major components so that control philosophies for a new process can be developed and enable the technology to advance from large-scale pilot project application to commercial-scale demonstration or application.”
Again, the focus will be on coal and natural gas power plants and industrial facilities, and the award can be used for up to 70% of project costs. The Office of Clean Energy Demonstrations will oversee both programs.
Concept papers for the funding will be due April 5, with full applications due June 21.
“Drastically cutting emissions across our economy through next-generation carbon management technologies is a critical component of President Biden’s strategy to combat the climate crisis and achieve our ambitious clean energy goals,” Energy Secretary Jennifer Granholm said in the DOE announcement. “By focusing on some of the most challenging, carbon-intensive sectors and heavy industrial processes, today’s investment will ensure America is on a path to reach net-zero emissions by 2050.”
Other Carbon Capture Funding
The White House and DOE continue to roll out IIJA funding, signaling the administration’s focus on implementing its clean energy and greenhouse gas emission reduction initiatives at speed and scale. The CCS announcement comes hard on the heels of Wednesday’s announcements of new initiatives aimed at expanding offshore wind. (See Interior Proposes 1st Lease for Offshore Wind in Gulf of Mexico and DOE Launches West Coast OSW Transmission Study.)
The carbon capture industry has already been buoyed by earlier funding announcements from the IIJA, focused mostly on demonstration projects, and the Inflation Reduction Act, which contains generous tax credits for such projects.
The IIJA funding includes $3.5 billion for four regional direct air capture hubs, each of which will have to capture, store or utilize one million metric tons of CO2 per year. The IRA contained significant increases in the 45Q tax credits, which specifically benefit CCS. For example, the credit for carbon captured from power or industrial plants and stored in underground salt caverns rose from $50/metric ton to $85/metric ton, and the credit for direct air capture jumped from $50 to $130/metric ton.
Coming on top of this support, Thursday’s announcement “is significant not just for the size of the investment, but for the impact it will have on further advancing the development and deployment of carbon management technologies in both heavy industry and power sectors,” Jessie Stolark, executive director of the Carbon Capture Coalition, said in a statement to NetZero Insider. “Testing, demonstrating and safely deploying new emissions reduction technologies in heavy industry sectors, such as steel, cement and concrete as well as the power sector are not optional if we are to meet climate targets.”
