The world’s first government purchasing program for carbon removal

The US government made the first step towards purchasing carbon removal today, becoming a customer to an emerging class of US companies working to move the needle on climate change. As part of the $35 million CDR Purchase Pilot Prizeopens in a new tab, the Department of Energy (DOE) selected 24 semi-finalists who will receive $50,000 each and move onto future program stages worth as much as $3 million each. The government has chosen approaches spanning biomass carbon removal, direct air capture, enhanced weathering, and marine carbon removal.

In doing so, the government will lower costs, drive out risk, and raise the bar for quality — and in the long term, galvanize private sector buyers to become a bonafide revenue source for carbon removal companies. Though it’s just one step, this announcement represents the power of public-private partnerships to grow and sustain a market fit for gigaton scale. We see purchasing as a quintessential role for the government to play: bridging the gap between demonstration and commercialization.

A speaker stands at a podium on a stage with six empty chairs behind her. Two American flags are on either side of the stage. The audience members are seated in the foreground, eagerly awaiting remarks from Secretary Granholm of the Department of Energy. — Source: Giana Amador/Carbon Removal Alliance

The news is part of a larger announcementopens in a new tab made in Washington, D.C. today calling for high-integrity carbon credit markets. Agency secretaries and White House leadership set forth guidelines to ensure one credit truly represents one tonne of carbon dioxide (or its equivalent) reduced or removed from the atmosphere. Or, as Secretary Granholm put it: “Credibility is the commodity.” The fact that carbon removal was part of this effort speaks to its importance in the administration’s broader climate policy portfolio and commitment to quality across technology approaches.

Phase 1 winners

Today’s semi-finalistsopens in a new tab include: (* an asterisk denotes an Alliance member)

Direct air capture with storage

Biomass with carbon removal and storage technologies

Enhanced weathering & mineralization

Planned or managed carbon sinks

These companies will get to call themselves one of the government’s first carbon removal providers. Of the Carbon Removal Alliance membership as a whole, almost half received the US government’s nod of approval today.

Importantly, this list includes all kinds of carbon removal approaches, from seawater electrolysis to agricultural applications of weathered rock. Programs that support a range of removal pathways and progress the entire carbon removal market keep this emerging industry on track to innovate and scale.

Phase 2 and beyond

Before the end of the year, the government will select 10 projects for Phase 2 and expect this program to run through 2028. (Our program guideopens in a new tab has a more detailed breakdown).

Today represents a first step — but can’t be the last. This pilot prize needs dedicated funding to continue, and more broadly should set the groundwork for future federal carbon removal procurement initiatives.

If you remember correctly, this program was originally funded through the FY23 appropriations process, which directed the Department of Energy to spend $35 million on a competitive purchasing pilot program. This program, as it stands, isn’t guaranteed to continue — but we’re working on that. We requested further funds from Congress in FY24, which netted $20 million in dedicated fundingopens in a new tab for this program, and are currently advocating for $35 million in FY25 to continue this program.

Building a market that can sustain gigaton-scale carbon removal means we’ll need both supply and demand for each ton removed from the atmosphere. To date, we’ve seen the government focus on building the supply of carbon removal, through RD&D programs that innovate and improve carbon removal technologies at DOE. As evidenced by the hundreds of emergent carbon removal companies in the US, that effort — which is still underway — has been successful.

Now, we’re seeing the government create demand for carbon removal. Government is playing a critical role — a must for cementing carbon removal is a public good, helping stabilize the climate for all.

Photo by Climeworks