The US is set to cancel funding for two major direct-air capture plants

The Department of Energy appears poised to terminate funding for a pair of large carbon sucking factories that were originally set to receive more than $1 billion in government grants, according to a department issued list of projects obtained by MIT Technology Review and circulating among federal agencies.

The projects include the South Texas Direct Air Capture Hub, a facility that Occidental Petroleum’s 1PointFive subsidiary planned to develop in Kleberg County, Texas. The other is Project Cypress in Louisiana, a collaboration between Battelle, Climeworks and Heirloom.

The list notes that around $50 million in funding has been terminated for both projects, the initial tranche of Department of Energy (DOE) funding for each development. Each was set to receive about $500 million, according to a DOE announcement last year. 

It’s not immediately clear if the termination of the initial grants also means the full funding will also be canceled.

Battelle and 1PointFive didn’t immediately respond to inquiries from MIT Technology Review. Nor did the Department of Energy.

“We’re aware that a list mentioning the project is circulating,” Climeworks said in a statement. “However, as there hasn’t yet been an official announcement or communication from the US Department of Energy, we’re not in a position to share details or provide an official statement at this stage.”

“We aren’t aware of a decision from DOE, and continue to productively engage with the Administration in a project review,” Heirloom said in a statement.

The grants were allocated through the Bipartisan Infrastructure Law, passed under former President Joe Biden, which created a program to build several regional direct-air capture hubs across the US.

“Today’s news that a decision to cancel lawfully-designated funding for the [direct-air capture hubs projects] could come soon risks handing a win to competitors abroad and undermines the commitments made to businesses, communities, and leaders in Louisiana and South Texas,” said Giana Amador of the Carbon Removal Alliance and Ben Rubin of the Carbon Business Council in a joint statement.

This is a developing story and will be updated.

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