Congress invests in carbon removal innovation

Congress wasted no time getting back into the swing of things this year, releasing and passing  a key package of Fiscal Year 2026 (FY26) appropriations bills. Every year, Congress works on a set of appropriations bills that fund critical programs across federal agencies. This package passed with strong bipartisan votes: 82-15 in the Senate and 397-28 in the House.

Historically, these appropriations bills have funded core carbon removal work — from permitting safe, effective geologic storage wells to funding first-of-a-kind carbon removal projects across the country — and this year is no different. CRA worked with congressional offices to emphasize the importance of this funding for the carbon removal industry and communities across the U.S. Last spring, we hosted a dozen carbon removal companies in D.C. for our annual lobby day, which allowed lawmakers to hear firsthand about the consequential projects happening in their states and districts. 

The final funding bills closely align with our requestsopens in a new tab and emphasize the role of the federal government in developing and deploying these critical technologies. They also provide a strong foundation for continued work at the Department of Energy. 

Critically, this package is an important down payment on maintaining American leadership and innovation in carbon removal. 

Here’s what this year’s bills means for carbon removal.

Continued investments in developing innovative carbon removal technologies

Congress continued to emphasize the role of federal agencies in developing catalytic carbon removal technologies by allocating $71.5 million to the Office of Science for research, development and demonstration (RD&D) of “diverse carbon dioxide removal technologies and approaches” and directs the Office of Science to coordinate with other DOE offices, including Fossil Energy, Energy Efficiency and Renewable Energy, and others. They also funded $10 million for RD&D for reactive carbon capture technologies, including a particular focus on mineralizing carbon emissions into solid waste streams or by-products.

Doubling down on a catalytic procurement program

The Carbon Dioxide Removal Purchase Pilot Prize was first included in FY23 appropriations as a mechanism to drive down the cost of technologies, unlock private sector capital in the future, and set high standards for carbon removal projects. Since then, it has provided an important signal to carbon removal companies and buyers that there is a viable carbon removal market. 

This year, Congress allocated $45 million the Purchase Pilot Prize to no fewer than four different pathways, with an emphasis on minimizing removal reversibility and maximizing storage duration. They also emphasized the importance of high-quality monitoring, reporting, and verification (MRV) in the success of the program, allocating not less than $4 million for MRV.

Supporting safe, effective geologic storage

Geologic storage is the foundation for many carbon removal technologies like direct air capture (DAC) and bioenergy with carbon capture and sequestration (BECCS). This work is regulated by EPA’s Underground Injection Control for Class VI Well Program. Congress allocated not less than $5 million for EPA to continue work on Class VI wells, with direction to expeditiously review permits and primacy applications. It also allocated $1.8 million to support Class VI regulatory education and training programs. Altogether, this underscores the importance of high-quality and expedient permitting and regulatory systems that encourage building in America.  

Repurposing DAC funding for small modular nuclear reactors

However, not all of the carbon removal provisions in this bill were positive for the field. The bill reprogrammed $1.04 billion of currently unobligated DAC Hub funding for small modular nuclear reactors. This preserves $800 million in funds for DAC, but cuts down on the potential impact of the program. Today, U.S. leadership on this technology is clear — we have more carbon removal patents, facilities, and jobs than any other country — but cuts like these erode that edge.

Looking toward the FY26 appropriations process, the Alliance remains a pragmatic, pro-business partner committed to working with Congress to protect the foundational programs that allow these technologies to scale. Consistent federal support is the definitive engine for transforming technical innovation into a gigaton-scale economic driver, securing high-quality American jobs and future-proofing our industrial base through strategic partnerships in mining, agriculture, manufacturing, and more.