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U.S. DOE Restores Carbon Capture Hub Funding: Texas and Louisiana Projects Approved

On April 18th, Reuters reported that the U.S. direct air capture (DAC) sector received a major boost after the Department of Energy (DOE) decided to retain funding for two flagship carbon removal hubs originally backed under the Biden administration.

The move removes months of uncertainty and protects more than $1 billion in federal support for the South Texas DAC Hub and Louisiana’s Project Cypress. The decision also reinforces that carbon removal remains part of the United States’ long-term climate and industrial strategy, even as policy priorities evolve.

From Funding Risk to Revival: DOE Keeps Landmark Direct Air Capture Hubs Moving Forward

The Department of Energy had previously placed several clean energy awards under review, including major carbon capture, hydrogen, and industrial decarbonization projects. Among the most closely watched were the two large DAC hubs in Texas and Louisiana, both of which risked losing federal backing.

  • South Texas DAC Hub, developed with Occidental’s carbon management arm 1PointFive, holds a $500 million federal award.
  • Project Cypress in Louisiana received $550 million in support.

Although both projects were awarded significant funding, only an initial $50 million tranche had been disbursed so far, leaving most capital still pending deployment.

Once fully operational, both facilities are expected to remove more than 2 million metric tons of CO₂ annually from the atmosphere. That scale places them among the most ambitious carbon removal projects globally and positions the United States as a leader in early DAC commercialization.

Energy Secretary Chris Wright noted that the agency retained projects with credible delivery pathways following extensive review discussions with applicants. The DOE’s Hydrocarbons Geothermal and Energy Office will now help guide next steps, including fund disbursement and project execution.

U.S. Direct Air Capture Market Gains Policy and Investment Support

The funding confirmation strengthens confidence across the growing U.S. DAC ecosystem, which depends heavily on long-term policy signals and federal incentives.

The country already leads global carbon removal development, supported by programs such as the $3.5 billion DAC Hubs initiative and the Section 45Q tax credit, which can provide up to $180 per ton for permanent carbon storage under current structures.

In parallel, corporate demand for high-quality carbon removals continues to expand. Technology firms, airlines, and industrial players are signing long-term agreements to secure carbon removal supply, reflecting a shift from low-cost avoidance credits toward durable carbon storage solutions.

direct air capture
Source: Green Fuel Journal

According to the International Energy Agency (IEA), more than 130 large-scale DAC facilities are now in development globally, with the United States holding a significant share of planned capacity. This pipeline highlights growing commercial interest even as the technology remains in its early deployment phase.

At the same time, regional DAC clusters are beginning to take shape. West Texas, for example, has emerged as a leading hub due to its combination of renewable energy access, subsurface storage potential, and industrial infrastructure. Projects like STRATOS, targeting 500,000 tons of annual CO₂ capture, illustrate how scaling could evolve through concentrated deployment.

direct air capture
Source: IEA

DAC Cost Challenges and Fuel Market Link Drive Long-Term Outlook

Despite strong policy backing, cost remains the most significant barrier for direct air capture expansion. Current estimates place DAC costs between $500 and $1,000 per ton of CO₂ removed, depending on technology type, energy sourcing, and storage logistics. While costs are expected to decline with scale and innovation, near-term economics remain challenging.

From Carbon Credits to SAF, DAC’s Business Case Is Getting Stronger

However, the value proposition is expanding beyond carbon credits. Captured CO₂ is increasingly viewed as a potential feedstock for synthetic fuels, including sustainable aviation fuel (SAF). This integration could improve project economics while also supporting fuel supply diversification.

Recent geopolitical tensions affecting global oil markets have added further urgency to alternative fuel development. In this context, DAC-linked synthetic fuel production could play a dual role by reducing emissions while supporting energy security.

Texas and Louisiana Lead the Transition

Texas and Louisiana are particularly well-positioned for this transition. Both states offer strong industrial infrastructure, access to geologic storage formations, and proximity to energy and chemical industries. Texas also benefits from expanding renewable energy capacity, which is important for powering energy-intensive DAC systems.

DAC US

Even so, scaling from today’s million-ton projects to gigaton-scale removal pathways will require sustained investment, policy support, and continued technological improvements. Some research suggests that large-scale DAC deployment may still require carbon prices or subsidies above $200 per ton for economic viability in the early phases.

Thus, the DOE’s decision to keep funding for the South Texas and Louisiana DAC hubs signals stability for a sector still shaping its commercial future. While cost and scale challenges remain, rising demand, broader policy support, and growing industrial interest suggest DAD is moving from experimental climate technology toward early-stage infrastructure development in the United States.

The post U.S. DOE Restores Carbon Capture Hub Funding: Texas and Louisiana Projects Approved appeared first on Carbon Credits.

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Carbon Footprint

The Strategic Case for Nature-Based Carbon Investments

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Nature-based carbon investments deserve consideration when they address a specific business dependency and produce outcomes you can measure. Imagine Moonbucks, a global coffee roaster planning next season’s espresso blend. It is considering natural Grade 4 coffee from Jimma, in southwestern Oromia, Ethiopia. Its sourcing decisions affect the roasting schedule and the cash tied up in coffee purchases. Moonbucks needs to understand which measures could protect that supply, what they would cost and how it would judge the results.

1. Define the sourcing problem before choosing a project

Moonbucks needs a dependable component for its espresso blend. Its procurement team wants continuity of volume and an agreed cup profile. Replacing a shipment at short notice could require new sample approval and changes to the blend, and given the schedules for cultivation, processing, and freight delivery, is practically impossible. Moonbucks needs to get this right, and its initial concern is inconsistent deliveries. It commissions an assessment of the supplying farms and post-harvest chain. The questions cover land condition, harvest availability and whether drying or storage problems are affecting saleable lots.

This distinction changes the investment brief. A tree-planting proposal cannot be assumed to fix drying problems. Better storage cannot restore eroded land. The team must establish which problem exists before selecting the response.

CCC’s guide to finding nature-based solutions in your supply chain explains where to look. Here, the next task is to turn a broad concern into a testable proposal.

2. Develop nature-based carbon investments around the actual supply chain

The assessment would trace Moonbucks’ purchases back through the exporter and supplying producer groups. Which farms supply the contracted lots? Who controls land-management decisions? How long does the buyer expect to maintain the purchasing relationship?

Furthermore, Jimma natural Grade 4 cannot be treated as interchangeable with every Ethiopian coffee. Moonbucks would need to test any substitute against its own blend and quality requirements.

Suppose Moonbucks’ assessment identifies an opportunity to maintain shade trees and restore vegetation along exposed streambanks. The IPCC describes agroforestry as a way to store carbon in vegetation and soil, with potential benefits for erosion control and water quality.1 Moonbucks would need local advice on species, growing conditions and maintenance before deciding how these measures fit its sourcing plan.

The proposal now has a defined sourcing connection and a candidate intervention. The next steps are to test its effect on production, assess carbon eligibility and build the financial case.

3. Compare the proposal with other ways to protect supply

WBCSD’s Nature-based Solutions Blueprint recommends comparing nature-based options with other responses across their benefits and costs.2 For Moonbucks, that means evaluating the landscape proposal alongside drying improvements, storage controls and alternative sourcing arrangements.

The product’s natural-process designation matters. Moonbucks should examine the drying and dry-milling chain alongside land conditions. Its team would check storage practices, contamination risks and incoming-lot quality to see whether problems arise before or after the coffee leaves the farms.

The revised proposal might combine land stewardship with separate post-harvest controls. Each component needs its own purpose and budget. A sustainability label should not obscure which activity is expected to solve which problem.

The project develops as the evidence improves. Its scope should follow the diagnosis rather than preserve the first idea unchanged.

4. Establish what the carbon outcome could count toward

Moonbucks’ sustainability team now tests the proposed carbon case separately from the sourcing case. Is the objective a measurable change in Moonbucks’ value-chain emissions, verified credits for separate voluntary use, or distinct outcomes under carefully defined arrangements?

Scope 3 covers value-chain emissions. A purchasing relationship alone does not prove that a farm intervention can be included in Moonbucks’ inventory. The team needs an applicable accounting method, defensible boundaries and evidence supporting attribution.

SBTi’s FLAG Guidance (forest, land and agriculture), version 1.2, says purchased credits used as offsets cannot meet near-term FLAG or energy and industry targets. Eligible land-based removals are subject to accounting requirements.3 Moonbucks needs to test its proposal against those rules before including an outcome in its targets.

For Moonbucks’ Jimma proposal, maintaining existing trees and establishing new vegetation could involve different carbon questions. Specialists must examine the baseline and additionality, meaning what changes because the project proceeds. They must also assess measurement and the risk that stored carbon is lost. CCC’s MRV and additionality article introduces those tests.

Until that work is complete, Moonbucks should not budget an assumed Scope 3 reduction or credit-sale receipt. Direct emissions reductions remain the priority.

5. Build a financial case that survives weaker assumptions

Moonbucks’ finance team would now build a multi-year budget. UNEP’s State of Finance for Nature 2023 compares current finance with the investment needed to meet climate, biodiversity and land-restoration goals.4 The company would cost its proposed activities, farmer participation and ongoing monitoring. Verification, where required, is a separate expense. Maintenance and responsibility for replacing failed plantings must remain visible after the initial establishment budget ends.

Operational benefits need equally careful treatment. If fewer rejected lots reduce emergency purchasing, count that saving once. Do not add “supply resilience” as another financial benefit when it represents the same avoided cost.

Moonbucks should compare a base case with slower benefits, higher implementation costs and no carbon revenue. It should also distinguish production outcomes from quality and shipment outcomes. A single good harvest would not prove that the landscape intervention caused better delivery performance.

A project can remain worth funding even when its carbon case needs more work. That decision must rest on the operational evidence and the company’s objectives, without unsupported environmental claims.

6. Fund a pilot with a clear expansion decision

Moonbucks’ first approval would fund a bounded pilot, rather than commit the entire sourcing program. Before spending, Moonbucks would agree on participating farms, responsibilities and the evidence needed at review.

Its scorecard could track farmer participation, implementation costs and plant survival, alongside accepted coffee volumes and lot-quality results. Carbon measurements would follow the selected method. Farm-level traceability must connect the intervention to the actual sourcing relationship.

Suppose Moonbucks’ review later finds that storage changes explain most quality improvements, while the land measures need longer observation. Those findings would shape the next decision: expand the proven component, adjust the landscape work or pause further spending. They would not justify crediting all improvements to tree planting.

This gives nature-based carbon investments a practical place in a multi-year strategy. Funding increases as the evidence supports it, and the project can change direction before a larger commitment.

Discuss a sourcing opportunity with CCC

Carbon Credit Capital’s nature-based supply-chain investment service uses its Dual-Value Model to examine supply-chain economics alongside potential sustainability outcomes.

Schedule a consultation to discuss your sourcing exposure and the questions to resolve before allocating capital.

Sources

  1. Intergovernmental Panel on Climate Change (IPCC), Climate Change 2022: Mitigation of Climate Change, Chapter 7, Agriculture, Forestry and Other Land Uses, section 7.4.3.3 (Agroforestry).
  2. World Business Council for Sustainable Development (WBCSD), Nature-based Solutions Blueprint, 5 June 2024.
  3. Science Based Targets initiative (SBTi), Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, section 3.1.4, pp. 37–38.
  4. United Nations Environment Programme (UNEP), State of Finance for Nature 2023, 2023.
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Carbon Footprint

How to buy plastic credits, and what to check before you do

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A plastic credit funds the collection of plastic waste in places where no formal system exists to collect it. Each credit represents a measured, independently audited quantity of plastic taken out of the environment or returned to use, tracked on a public registry.

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Carbon Footprint

EU carbon credit claims after 27 September 2026

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EU carbon credit claims changed on 27 September 2026, the day the Directive (EU) 2024/825 began to apply across the European Union. The change is narrow. It changes how a company can talk about the credits it buys. A product can no longer be called neutral on the strength of compensation alone; however, every specific, evidenced statement about what a company measured, reduced, and funded stays fully available.

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