DOE Announces $3.1 Billion Now Available for Carbon Management Technologies – Holland & Knight

In December 2024, the U.S. Department of Energy (DOE) opened the second round of two funding opportunities under the Bipartisan Infrastructure Law (BIL), totaling $3.1 billion. These initiatives – the Regional Direct Air Capture (DAC) Hubs and the Carbon Capture Demonstration, Large-Scale Pilots and Networked Demonstration Commercialization programs – are critical to advancing the deployment of carbon management technologies and supporting technology readiness levels (TRL) across the United States.
Deadlines: Letters of intent and concept papers for the Regional DAC Hubs are due by Jan. 31, 2025, at 11:59 p.m. ET, and concept papers for the Carbon Capture Demonstration, Large-Scale Pilots and Networked Demonstration Commercialization Program are due by March 1, 2025, at 5:00 p.m. ET.
Holland & Knight is proud to have supported clients who secured $543 million in funding across the first round of both programs.
The BIL allocated nearly $7 billion in total for both programs. The Regional DAC Hubs program aims to establish up to four hubs, each capable of capturing at least 1 million metric tons of CO2 annually from the atmosphere. Projects must capture and sequester, utilize, or sequester and utilize CO2. In the first round of funding, the DOE awarded two hubs in August 2023, leaving at least two hubs to be funded in the second round. In February 2024, the DOE issued a request for information (RFI) soliciting input on the merits of funding mid- and large-scale DAC facilities, as well as developing price supports for carbon. While the newly released proposal includes a topic area for mid-scale DAC facilities, the DOE did not include opportunities for price supports. Furthermore, the DOE added a topic area to fund the development of equipped host sites that provide shared resources for DAC developers at the early stages of commercialization.
The Carbon Capture Demonstration and Large-Scale Pilots program focuses on accelerating the deployment of carbon management technologies in power generation, industrial and other commercial applications. In 2023, the DOE awarded funding to three demonstration projects (one for coal-fired power generation and two for natural gas-fired power generation) and eight front-end engineering design (FEED) studies. New to this proposal is the “networked demonstration commercialization program,” which is focused on ensuring that the federal government supports market confidence in carbon capture infrastructure investments.
This program supports the design, construction and operation of mid- and large-scale DAC facilities and infrastructure. Building on the investments from the first funding round, the program aims to establish a robust ecosystem of projects. By offering support at various stages of commercialization, it seeks to accelerate the development and expansion of additional DAC hubs.
Topic area and funding information can be found below:
Topic Area
Maximum Award Size
Number of Awards
Cost Share
Maximum Period of Performance
1. Infrastructure Access Platforms
$250 million
1-3
At least 50 percent
10 years
2. Mid-Scale Commercial DAC Facilities
$50 million
4-8
3. Large-Scale Commercial DAC Facilities
$600 million
2-6
This Notice of Funding Opportunity (NOFO) seeks to support projects that improve the efficiency, effectiveness, affordability and environmental performance of carbon capture technologies across various applications. Statutory requirements mandate funding for six facilities: two coal-fired power plants, two natural gas-fired power plants and two industrial facilities. Since the natural gas requirement has already been fulfilled in the prior round, the open NOFO focuses on meeting the remaining statutory obligations.
Topic area and funding information can be found below:
Topic Area
Award Size Range
Maximum Award Size
Number of Awards
Cost Share
TRL
Period of Performance
1. Carbon Capture, Usage and Storage (CCUS) Demonstration
$175-400 million
$750 million
1-3
At least 50 percent for demonstration
>7
8-10 years
2. Large Scale Pilots
$75-135 million
$450 million
1-5
At least 30 percent for demonstration
5-6
3. Networked Demonstration Commercialization
$20-30 million
$100 million
1-3
At least 50 percent for demonstration
7
Holland & Knight Insight

Although there is speculation that DOE BIL funding such as this may not move forward under the incoming Trump Administration, the Holland & Knight team believes these programs will be perceived as bipartisan and are very likely to progress through the transition from the Biden to the Trump Administration. Holland & Knight’s bipartisan, bicameral Public Policy & Regulation Group is a seasoned and fully integrated clean energy policy and legal team that is focused on engaging with the DOE, Congress and the executive branch to help clients realize their goals. To date, the team has helped clients secure and negotiate over $20 billion of innovative energy funding commitments from the DOE.
For more information on how our attorneys and advisors can assist with future DOE funding opportunities, help protect existing DOE investments or advocate for future legislation related to clean energy funding and finance, please reach out to the authors.
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