Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Technology

These Carbon Removal Companies Got the Energy Department’s Stamp of Approval

The Department of Energy is advancing 24 companies in its purchase prize contest. What these companies are getting is more important than $50,000.

Heirloom DAC.
Heatmap Illustration/Heirloom Carbon

The Department of Energy is advancing its first-of-a-kind program to stimulate demand for carbon removal by becoming a major buyer. On Tuesday, the agency awarded $50,000 to each of 24 semifinalist companies competing to suck carbon dioxide out of the atmosphere on behalf of the U.S. government. It will eventually spend $30 million to buy carbon removal credits from up to 10 winners.

The nascent carbon removal industry is desperate for customers. At a conference held in New York City last week called Carbon Unbound, startup CEOs brainstormed how to convince more companies to buy carbon removal as part of their sustainability strategies. On the sidelines, attendees lamented to me that there were hardly even any potential buyers at the conference — what a missed opportunity.

Conference panelists asserted that the industry needed to rebuild trust. Purchasing carbon credits has become a risky strategy for companies. In one investigation after another, journalists and researchers have shown that many of the projects behind these credits fail to produce the climate benefits they advertise. There’s a class action lawsuit against Delta Air Lines for marketing itself as “carbon neutral” after purchasing such questionable carbon offsets.

Carbon removal credits are technically different from the offsets that companies bought in the past, which were based on projects that reduce emissions to the atmosphere rather than remove carbon that’s already heating the planet. But there’s still a risk of sham projects. And because the field is relatively new, there’s not yet a set of widely agreed-upon standards to measure and verify how much carbon is being removed.

The Department of Energy hopes that by selecting 24 companies that have been vetted by government scientists, it’s sending a signal to the private sector that there are at least some projects that are legitimate. “We can’t wait to invest in CDR until those standards have been codified,” Noah Deich, the agency’s deputy assistant secretary of carbon management, told me. “We need to invest now so that we actually get the data that we can use to inform the standards, and then over time codify those standards and strengthen and improve them.”

The semifinalists represent a wide range of carbon removal methods. Nine of the companies are building machines that capture carbon dioxide directly from the air. Seven take advantage of the natural ability of plants and algae to suck up carbon, and have developed systems to sequester that carbon for far longer than would otherwise occur. Five employ rocks that naturally absorb carbon and have figured out how to speed up the process. The last three capture carbon from the ocean, enabling the world’s biggest carbon sink to draw down more from the atmosphere.

To proceed to the final round, all of these companies will have to draw up contracts that say how quickly they will be able to remove the promised tons of carbon, and who they will work with to measure and verify the process.

The Biden administration is spending billions on research, development, and deployment of carbon removal. Some of the semifinalists, like Climeworks, Heirloom Carbon, and 1PointFive, were already selected for grants from the DOE to build the U.S.’s first “direct air capture hubs” — projects capable of removing one million tons of carbon from the air per year. But those hubs will fail if the companies don’t ultimately find buyers for their carbon removal. “Every single CDR project that we’re seeing today requires some sort of voluntary credit sale to be profitable,” said Deich.

The Department of Energy’s $30 million budget to buy carbon removal is relatively small. The semifinalists said they could deliver a wide range of credits with their share of the funds, from 3,000 over a three-year period, to more than 30,000. In any case, DOE is unlikely to afford much more than 100,000 tons of carbon taken out of the atmosphere, equivalent to about 0.002% of the CO2 the United States emitted in 2022. When distributed among 10 companies, it’s certainly not enough to finance a project. But Deich told me he sees this contest as a public-private partnership. The agency is challenging the semifinalists to leverage the DOE’s recognition to try and sell as many credits as they can. It’s one of the criteria they’ll be judged on for the final phase of the contest.

Several semifinalists I spoke with were optimistic the DOE’s backing would help. “One of the things that the private sector is wrestling with is the technical underwriting of various carbon dioxide removal technologies,” Barclay Rogers, the CEO of the carbon removal company Graphyte, told me. Graphyte’s process almost sounds too simple to work. The company takes discarded plant matter from forests and fields, dries it out so that it doesn’t decompose, compresses it into bricks, and then buries them. Graphyte has already built a small processing facility in Arkansas and secured a burial site that could store an estimated 1.5 million tons of CO2. Rogers was excited to have DOE’s backing as “a broad signal to the market of the viability of Graphyte’s carbon casting process.”

Others were grateful that the government was branching out to new technologies. To date, most of the DOE’s carbon removal programs have supported direct air capture. Companies working on other approaches have been shut out of funding opportunities, and some worry that this has contributed to a perception among buyers that direct air capture is the only valid method. “We think this is a huge step forward, since it’s really the first time not only that the U.S. government is going to become a purchaser of carbon removal, but also funding a full range of carbon removal solutions,” Nora Cohen Brown, head of market development and policy at Charm Industrial, told me. (Charm also buries plant waste underground, but in the form of oil.) “We really think that biomass CDR has immense potential,” she said. “It’s a big deal to have DOE’s blessing for that pathway.”

Edward Sanders, the chief operating officer of a startup called Equatic, told me that being a semifinalist meant the company would be able to build a plant in the U.S. much sooner than it initially planned. Equatic has developed technology to remove carbon from seawater, enabling the ocean to take up more carbon. It’s currently building its first large-scale plant in Singapore. “This tells prospective future buyers that there is a role to play in the near term in the U.S. for a marine-based pathway.”

Many of the companies on the list, including the three I just mentioned, have already been relatively successful in selling credits. Graphyte sold 10,000 to American Airlines. Equatic has a 62,000 deal with Boeing. Charm will remove more than 100,000 tons for Frontier Climate, a group of buyers that includes Stripe, Alphabet, Shopify, and Meta. But even though a handful of tech companies and airlines are buying carbon removal, these sweeping gestures are not enough to sustain the industry, let alone grow it to the scale that scientists say will be necessary to halt climate change.

DOE’s purchase may help increase confidence in some of these companies and approaches, but it may not do much to solve another problem: There’s little incentive for anyone to pay for carbon removal today, and it’s much more expensive than other options companies have to reduce their emissions. Credits can cost between several hundred to more than a thousand dollars each.

Deich said the agency was trying to set an example for other buyers. Instead of creating a net-zero target and searching for the cheapest credits to accomplish its goal, it’s prioritizing quality and only buying what it can afford. “We need to pay what it costs,” he said, “and then developers can develop projects and figure out how to do it cheaper so that over time, it starts to come down the cost curve significantly, and we can buy larger and larger quantities.”

But this is only the near term plan to help the industry mature. Ultimately, Deich doesn’t think that the voluntary trade of credits will be enough to support the levels of carbon removal that will make a difference in climate change. He sees this purchase prize program as a way to start building the government’s capacity to play a larger role. “There’s going to need to be some sort of mandate or public procurement that happens for the field to really scale beyond 2030,” he said.

The full list of semifinalists:

Avnos, Inc. — direct air capture — 3,000 credits

Carbon America — direct Air Capture — 3,400 credits

CarbonCapture, Inc. — direct air capture — 3,333 credits

Climeworks — direct air capture — 3,500 credits

Global Thermostat and Fervo Energy — direct air capture — 3,500 credits

Heirloom — direct air capture — 3,030 credits

1PointFive — direct air capture — 3,861 credits

280 Earth — direct air capture — 3,000 credits

8 Rivers — direct air capture — 7,200 credits

Arbor Energy — biomass with carbon removal and storage — 8,000 credits

Carbon Lockdown — biomass with carbon removal and storage — 17,143 credits

Charm Industrial — biomass with carbon removal and storage — 5,000 credits

Clean Energy Systems — biomass with carbon removal and storage — 11,320 credits

Climate Robotics — biochar — 30,252 credits

Graphytebiomass with carbon removal and storage — 30,000 credits

Vaulted Deep —biomass with carbon removal and storage — 10,320 credits

Alkali Earth — enhanced rock weathering and mineralization — 8,108 credits

CREW Carbon — enhanced rock weathering and mineralization — 7,500 credits

Eion — enhanced rock weathering and mineralization — 9,900 credits

Lithos Carbon — enhanced rock weathering and mineralization — 8,109 credits

Mati Carbon — enhanced rock weathering and mineralization — 4,561 credits

Ebb Carbon— marine-based carbon removal — 3,000 credits

Equatic— marine-based carbon removal — 6,521 credits

Vycarb Inc.— marine-based carbon removal — 3,000 credits

Yellow

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Energy

New York’s Energy Future Could Look Like Canada’s ... Or Tennessee’s

Reading between the lines of Governor Kathy Hochul’s big nuclear announcement.

Kathy Hochul.
Heatmap Illustration/Getty Images

With New York City temperatures reaching well into the 90s, the state grid running on almost two-thirds fossil fuels, and the man who was instrumental in shutting down one of the state’s largest sources of carbon-free power vying for a political comeback on Tuesday, New York Governor Kathy Hochul announced on Monday that she wants to bring new, public nuclear power back to the state.

Specifically, Hochul directed the New York Power Authority, the state power agency, to develop at least 1 gigawatt of new nuclear capacity upstate. While the New York City region hasn’t had a nuclear power plant since then-Governor Andrew Cuomo shut down Indian Point in 2021, there are three nuclear power plants currently operating closer to the 49th Parallel: Ginna, FitzPatrick, and Nine Mile Point, which together have almost 3.5 gigawatts of capacity and provide about a fifth of the state’s electric power,according to the nuclear advocacy group Nuclear New York. All three are now owned and operated by Constellation Energy, though FitzPatrick was previously owned by NYPA.

Keep reading...Show less
Blue
Energy

Why Oil Markets Aren’t Sweating the Strait of Hormuz

Even as Iran retaliated against U.S. airstrikes, prices have stayed calm.

Pete Hegseth and Dan Caine.
Heatmap Illustration/Getty Images

Oil prices have stayed stable so far following the U.S. strikes on Iranian nuclear facilities over the weekend, and President Donald Trump wants to keep it that way.

In two consecutive posts on Truth Social Monday morning, the president wrote “To The Department of Energy: DRILL, BABY, DRILL!!! And I mean NOW!!!” and “EVERYONE, KEEP OIL PRICES DOWN. I’M WATCHING! YOU’RE PLAYING RIGHT INTO THE HANDS OF THE ENEMY. DON’T DO IT!”

Keep reading...Show less
Blue
Climate

AM Briefing: The Northeast Bakes

On record-breaking temperatures, oil prices, and Tesla Robotaxis

Why the Intense Heat Wave Hitting the Northeast Is Unusual
Heatmap Illustration/Getty Images

Current conditions: Wildfires are raging on the Greek island of Chios • Forecasters are monitoring a low-pressure system in the Atlantic that could become a tropical storm sometime today • Residents in eastern North Dakota are cleaning up after tornadoes ripped through the area over the weekend, killing at least three people.

THE TOP FIVE

1. Intense U.S. heat wave could break numerous records

A dangerous heat wave moves from the Midwest toward the East Coast this week, and is expected to challenge long-standing heat records. In many places, temperatures could hit 100 degrees Fahrenheit and feel even warmer when humidity is factored in. “High overnight temperatures will create a lack of overnight cooling, significantly increasing the danger,” according to the National Weather Service. Extreme heat warnings and advisories are in effect from Maine through the Carolinas, across the Ohio Valley and down into southern states like Mississippi and Louisiana. “It’s basically everywhere east of the Rockies,” National Weather Service meteorologist Mark Gehring told The Associated Press. “That is unusual, to have this massive area of high dew points and heat.”

Keep reading...Show less
Yellow