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DOE reviews Biden-era carbon removal projects for

potential

funding cuts

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Louisiana and Texas projects face uncertainty over funding

decisions

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Louisiana officials lobby to secure DAC hub funding

By Valerie Volcovici

WASHINGTON, March 28 (Reuters) - The U.S. Department of

Energy is weighing cuts of hundreds of millions of dollars in

grants to two projects in Texas and Louisiana aimed at

demonstrating technology to capture carbon from the atmosphere

at commercial scale, three sources familiar with the matter

said.

The Direct Air Capture hubs, part of former President Joe

Biden's effort to slash U.S. greenhouse gas emissions, were

launched by the DOE's Office of Clean Energy Demonstrations to

help commercialize the expensive and nascent carbon removal

technology. At full operation, the two hubs could remove more

than 2 million metric tons of carbon emissions per year, far

more than the world's biggest operating DAC plant in Iceland.

The two largest U.S. hubs are Louisiana's Project Cypress,

run by research and development firm Battelle, Climeworks

Corporation and Heirloom Carbon Technologies, and the South

Texas DAC Hub, proposed by Occidental Petroleum ( OXY )

subsidiary 1PointFive, Carbon Engineering and engineering firm

Worley.

The projects are on a list of Biden-era programs targeted to

be eliminated to fund tax cuts in Congress's budget

reconciliation bill, which is being reviewed by Energy Secretary

Chris Wright, the sources said. They requested anonymity because

they are not authorized to speak publicly.

The two hubs were awarded $550 million and $500 million

respectively under Biden, but have so far only received their

first tranche of $50 million each.

An Energy Department spokesperson said it was conducting a

department-wide review to ensure programs align with the Trump

administration's priorities.

"This review is ongoing, and speculation by anonymous sources

about the results of the review are just that - speculation,"

the spokesperson said.

The roughly 20 smaller DAC research projects identified by

Biden's administration for grants were not on the list, and

their status was unclear, the sources said.

The capital-intensive demonstration projects cannot continue

without receiving the rest of their grants and cannot survive

even two more months of uncertainty as Wright makes his final

funding decisions, said a source involved in one of the

projects.

Louisiana state officials turned up the pressure on Wright

and the state's congressional delegation this week to save

funding for its DAC hub.

"I urge you to contact DOE Secretary Chris Wright and ask

him to take every necessary step to advance this critically

needed federal grant," Louisiana's Secretary for Economic

Development Susan Bonnett Bourgeois wrote in a letter on

Thursday to the state's U.S. senators and representatives, which

was seen by Reuters.

Occidental did not respond to a request for comment on the

potential DAC hub cuts but said on the company's February

investor call that it has had several conversations with

President Donald Trump about the need for DAC technology and for

subsidies.