In recent years, the United States has emerged as a promising environment for carbon dioxide removal (CDR) projects, largely due to a robust private sector and supportive governmental frameworks introduced during President Biden’s tenure.
During his administration, President Biden signed significant legislation, including the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act. These frameworks allocated billions of dollars to support initiatives centering on CDR technology and carbon capture and storage (CCS).
Key incentives such as the 45Q tax credit were established, which spurred traction for government procurement programs aimed at CDR. The name change of the Office of Fossil Energy to the Office of Fossil Energy and Carbon Management signaled a positive and promising shift for the CDR sector, bolstered by collaboration between private investors and government resources.
However, the political climate shifted dramatically with the inauguration of President Donald Trump in January 2025. Many stakeholders began to wonder how the new Republican administration would affect the burgeoning climate technology industry, particularly CDR projects that had gained momentum under Biden.
The Trump administration’s initial moves suggested a retreat from the progress made in the CDR sector, exemplified by the issuance of a “skinny budget” that proposed revoking $14 billion in unspent funds from the IIJA. This could have had significant repercussions for carbon capture initiatives across the country.
While projects already approved were spared from immediate cuts, the proposed budget indicated a potential distancing from federal support for CDR, marking a troubling development for industry advocates. Furthermore, the administration indicated a focus on the domestic production of fossil fuels, including plans to revert the Office of Fossil Energy to its original name, removing the carbon management designation.
As federal carbon procurement programs have paused, stakeholders are left uncertain about the scaling potential of CDR amid changing federal priorities and funding.
To gain insights into the current pulse of the CDR sector, we engaged with key players in the field. Erin Burns, the executive director at Carbon180, a Washington-based nonprofit focused on carbon removal research and policy, shared her perspective on the evolving landscape.
Having served as the organization’s policy director since 2018, Burns has witnessed significant changes in CDR advancement under both Democratic and Republican administrations. Currently, she and her team are advocating for CDR funding amid this year’s federal appropriations process, shaped by the “skinny budget.”
Burns noted a notable difference this year, particularly with a Republican-controlled Congress, which has shown a renewed focus on reducing the federal government’s role in energy research and development.
She observed that this has been felt more acutely under the current administration compared to previous years. During her tenure working for Senator Joe Manchin between 2011 and 2015, the Department of Energy (DOE) R&D budget was not as heavily politicized.
Burns articulated that the current budget’s focus on potential cuts to CDR marks a significant political shift, emphasizing that the industry has not faced such pressure previously.
Despite this looming uncertainty, Burns remains optimistic about potential avenues for CDR progress. She mentioned the importance of leveraging federal appropriations to keep carbon management in the budget discussions, noting their previous successes, including the first dedicated federal CDR R&D funding of nearly $60 million in 2019.
She emphasizes the significance of protecting direct air capture (DAC) hubs and urges industry advocates to not only preserve existing federal support but to seek opportunities for its expansion.
Rory Jacobson, Head of Policy at Carbon Direct, a carbon management consultancy, provided clarity on the status of the DAC hubs program.
According to Jacobson, while the hubs have not been terminated, their future progression hinges on meeting specific milestones and navigating various challenges, such as foreign entity restrictions and preserving tax credit transferability.
He noted that the CDR community has been actively engaging lawmakers to highlight project risks and underscore the broader value that these initiatives bring to the table. For now, he concludes, the situation remains a waiting game, contingent on further clarity from the Trump administration regarding DAC funding.
Amid these uncertainties, there are positive signals within the U.S. CDR market. Companies such as Elimini, a bioenergy with carbon capture and storage (BECCS) provider, remain optimistic about their prospects in the current climate.
Elimini is actively vetting potential locations for 20 new BECCS plants across the U.S. and plans to announce a couple of selected sites within the next 12 to 18 months.
Mariano Molina, Elimini’s VP of Government Affairs and Stakeholder Relations, explains that with the 45Q tax credit still in effect, the company’s strategic outlook remains unchanged.
Elimini aims to strengthen its U.S. presence by engaging policymakers and the administration to highlight the significance of BECCS technology in positioning the U.S. as a leader in climate technology, while also generating job opportunities in rural regions.
Molina asserts the immense potential presented by BECCS, emphasizing its ability to contribute to a more stable and secure power grid while providing base load power that does not rely on intermittent sources.
He points out the dual appeal of CCS technology to both Republican and Democratic lawmakers, as its role in fostering job creation in rural America resonates with a broad political audience.
The positive sentiment surrounding CCS was further illustrated in a recent Earth Day statement from the White House, which expressed strong support for carbon capture technologies.
Elimini remains upbeat in the face of changing federal funding trends, noting the ongoing vitality of the voluntary carbon market both in the U.S. and globally.
Molina believes that the demand for stable and clean power will only continue to grow, positioning their technology favorably in the marketplace.
He also acknowledges that globally, many governments are actively seeking to accelerate the development and deployment of climate technologies to meet climate objectives over the next decade and beyond.
In contrast, Vycarb, a New York-based CDR technology firm, has faced challenges due to delays in federal funding initiatives from the DOE.
While Vycarb had recently secured partial funding from a DOE voucher program, the company quickly learned that further disbursements were being put on hold, leaving uncertainty in the air about future support.
CEO Garrett Boudinot noted that while the CDR market has shown signs of significant challenges, private backing has remained consistent.
In response to the shifting landscape, Vycarb has been proactive in building international partnerships, focusing on emerging markets in Asia Pacific, such as Japan and New Zealand.
Boudinot believes that these international connections can provide a buffer against the instability felt in the U.S. CDR market.
He highlighted that despite domestic uncertainties, the private sector has shown resilience, as major U.S. corporate voluntary carbon market buyers have maintained their commitments to purchasing credits.
Looking ahead, Boudinot expressed hopeful outlooks for the CDR industry over the next five years, anticipating that increased policy support in other global markets will stimulate greater carbon removal deployment and attract a broader base of buyers.
The mixed sentiments and proactive responses from various CDR stakeholders underscore an evolving landscape in the U.S. climate industry.
While the political environment under President Trump poses notable challenges, the commitment to innovation and growth within the CDR sector remains steadfast.
As industry leaders look for clarity in federal policy decisions, 2025 will prove to be a pivotal year in determining the future of carbon removal initiatives in the U.S. and solidifying its position amidst global competition.
image source from：carbonherald
