The Regional Direct Air Capture (DAC) Hubs program was created to narrow the gap between the current technological maturity of domestic DAC innovations and the large scale required for meaningful climate impact. Now that the Department of Energy (DOE) has released a notice of intent (NOI) for a second tranche of funding, set at $1.8 billion, we’re reflecting on what the program’s achieved so far — and where it’s headed.
Last August, DOE’s Office of Clean Energy Demonstrations (OCED) selected two out of four DAC hubs to receive up to $500 million in potential funding: Project Cypress in Louisiana and the South Texas DAC hub. Also awarded, at smaller amounts, were five projects conducting Front-End Engineering Design (FEED) studies and 14 initiatives exploring early-stage feasibility.
After a year of negotiations, OCED has released about $50 million in funds for each megaton hub to enter phase two. From the announcements, we’ve gleaned more details about these historic projects’ location, scale, and community benefits commitments — as well as the potential challenges ahead. As the initial two hubs move into their second phase, DOE and developers alike can translate first-year lessons into action through recurring funding opportunities over the next several years.
If successful, DAC hubs offer us a chance to combine deep emissions cuts with high-quality carbon removal, propelling us closer to a net-negative future. In this moment, we’ll explore the milestones of the regional DAC hubs, take a look at lessons learned, and provide best practice recommendations for DOE to maximize the program’s influence.
Program process and timeline, from conception to action
As we trace the program’s journey, we go back to May 2022 when DOE released an initial NOI. This was followed by a funding opportunity announcement (FOA), and developers answered the call to action by the following February. Six months later, the Biden-Harris administration was ready to announce $1.2 billion in funding for two commercial-scale DAC hubs and 19 feasibility and design studies.
Though OCED intended to move forward swiftly, challenges arose that delayed the timeline. Project Cypress’ award was released in March 2024, but negotiations for the South Texas hub just concluded last month. Further, only a couple of feasibility and design studies have publicly announced their funding awards, which range from $2.7 million to $12.5 million.
While both commercial hubs are still in the planning stages, they have shared notable signs of progress. Over in Louisiana, Climeworks — one of the technology providers leading Project Cypress — has signed a Memorandum of Understanding (MOU) with Gulf Coast Sequestration, a carbon storage provider in the region. Securing this relationship is critical to developers’ plans to store the carbon removed by Cypress in Louisiana’s vast geologic reservoirs. Meanwhile, 1PointFive — a subsidiary of Occidental Petroleum and the lone lead for the hub in Kleberg County, Texas — has applied for a Class VI well permit from the Environmental Protection Agency (EPA), in order to line up their own geologic storage plans.
Over the next two to three years, both hubs’ developers will iron out their projects’ technical and social components. Project Cypress will launch a new community benefits planning process, while 1PointFive will create an independent Community Advisory Board and a public platform that shares updates and collects feedback. The South Texas team will also continue the FEED phase for their facility, which is currently scoped for one million annual tons of removal.
Current capacities and future goals
As we reflect on the progress of the DAC Hubs program, it’s important to recognize that, as a first-of-its-kind endeavor, DAC hubs face numerous overlapping challenges that could affect project timelines — which makes openness to trial and error, collaboration, and iterative learning important.
Today’s DAC projects have not moved far beyond the mid-range design capacity of 5K–25K tons of CO₂ removed per year, meaning there’s much progress needed to reach the 1 million annual tons of removal that Congress has mandated for each hub. As developers look to grow their technology, they’ll need to expand their operational capacity, access deeper labor pools, set up a robust supply chain, and secure agreements to test novel technologies in commercial environments.
Scaling hard technology, which involves assembling tangible parts into systems, is inherently complex, time-consuming, and often slowed by factors beyond any single organization’s control, such as competition for renewable energy, EPA permitting, and the network of federal and state pipeline regulations. Each step introduces potential delays or cost increases for the inaugural hubs, requiring careful coordination with stakeholders while balancing investor expectations for returns.
The Department of Energy’s role
The Hubs program is in a learning stage, precisely as intended. To meet gaps in the current DAC ecosystem and set hubs up for achieving megaton scale, DOE has made strides to bolster innovation at all technology readiness levels; the agency has stood up efforts like the Pre-Commercial Technology Prize, a request for information about mid-scale DAC, and the Carbon Dioxide Removal Purchase Pilot Prize. Thoughtful implementation of these initiatives can catalyze market development while providing a roadmap for how companies can uphold rigorous monitoring, reporting, and verification practices from day one — all of which set a hopeful scene for the hubs to flourish.
Now, with two large-scale projects moving into phase two, DOE can further advance the DAC Hubs program by focusing on a few critical areas.
First, enhancing coordination among carbon removal, carbon transportation and storage, zero-carbon energy, and transmission sectors is essential for leveraging renewable energy resources. To ensure net-negative outcomes, hub projects must prioritize energy sources and carefully select locations that balance cost and resource needs with availability. This will require deep collaboration across sectors to manage competing demands while mitigating adverse environmental and community impacts.
Second, transparency is vital for facilitating public oversight, innovation, and trust — all of which require precious time to build. DOE must moderate these tensions by maximizing transparency without compromising intellectual property. While efforts such as the Energy Justice to the People Roadshow and DOE’s Community Benefits Planning forums have started to connect communities with carbon removal projects, many still feel disconnected due to inconsistent, incomplete, or biased access to information. Clearly communicating when specific information about a given hub cannot be shared is crucial, as is outlining what the public can expect, where to find updates, and when new information will be available.
Finally, many developers are navigating the CBP process for the first time, and some organizations feel CBPs outsize the scope of their projects. While CBPs are integral, they shouldn’t be one-size-fits-all. DOE must offer flexibility and support to ensure that the scale of community engagement corresponds to the scale of each hub project, preventing the alienation of either developers or communities.
Best practices for the next phase of hubs
Focusing on these priority areas, we’ve honed a few concrete recommendations for DOE as they gear up for a second FOA to usher in these transformative projects.
- Prioritize public and environmental health: DOE should move project suppliers to incorporate the achievement of public and environmental health metrics into their strategic planning outcomes.
- Enhance transparency in project evaluation: Labeling projects as advancing or not advancing is insufficient. DOE should provide detailed assessments of project progress to improve accountability, empower meaningful community engagement, and support other developers traversing the DOE award process.
- Tailor information sharing by development stage: DOE should adopt information-sharing practices that vary by the project’s technical assistance level. In early-stage projects, transparency might resemble sharing foundational objectives and soliciting community questions, whereas later stages could highlight specific milestones and include more detailed technical updates. Clear communication of objectives, milestones, and community input opportunities is essential at each stage.
- Release CBPs early: DOE should push developers to release CBPs before finalizing project site selection for later-stage projects and commit to an inclusive feedback process. Proposals should detail community engagement schedules, public input opportunities, and how feedback will shape project plans.
As DOE advances the program and releases more award information, they have an opportunity to socialize clear expectations and objectives, allowing all stakeholders to understand what constitutes progress or transgression. With initiatives as ambitious as the Hubs program, all stakeholders step into explorative territory where vulnerabilities are exposed, missteps are inevitable, and promising paths may fade into obscurity. Now that DOE has released a second NOI, which we’ll explore more in an upcoming blog, we have a clearer idea of how these tensions can be navigated — and plan to outline criteria for what constitutes a “good” DAC hub.
In this space, trial and error are essential companions on the journey of progress. A thriving DAC ecosystem that delivers high-quality carbon removals and produces public health is more likely to succeed when DOE prioritizes innovation through collaboration, dynamic communication, and transparency throughout the Hubs program.
Edited by Tracy Yu. Image by Maria Teneva.
