“There are moments in the human experience where we have inflection points… Magna Carta, Treaty of Versailles, Bretton Woods, DAC Day!” – Jason Grumet, Founder and President of the Bipartisan Policy Center at DAC Day
This quip was perhaps a bit of hyperbole, but not much. There is growing consensus among the scientific community that carbon dioxide removal strategies, including direct air capture (DAC), are an important component for achieving our climate goals. On June 22, 2022, the Bipartisan Policy Center, in partnership with BPC’s DAC Advisory Council, brought together representatives from the Department of Energy and the broader DAC community to discuss the opportunities that DAC presents as a technology, including uncertainties about the implementation of DAC Hubs from last year’s bipartisan infrastructure bill.
The event began with an opening keynote from Sen. Sheldon Whitehouse (D-RI), a leader on environmental issues in the Senate. He spoke about the necessity for deploying carbon dioxide removal (CDR) to meet climate goals and advocated for procurement legislation that can spur early markets for CDR, including his recently introduced Federal Carbon Dioxide Removal Leadership Act.
There may be no silver bullet, but we have many options. We have silver buckshot, and we will need to pursue those multiple solutions. Beyond cutting carbon emissions, we need to remove gigatons of carbon dioxide from the atmosphere by 2050. Otherwise, we're shooting right past our limit of safety. Once you're past the limit of safety, adding no further emissions, isn't enough. You have to claw back the excess carbon.
After the opening keynote, the first panel featured Noah Deich, Acting Director of CDR and CO2 Conversion at DOE’s Office of Fossil Energy and Carbon Management, and Brad Markell, Executive Director of the Industrial Union Council, AFL-CIO. Both speakers reflected on the tremendous progress that DAC has made as a technology base over the past 10 years—moving from thought experiment to thousands of tons of removal capacity being piloted today—and how carbon management is a requisite component of meeting our climate goals. They also discussed the job creation potential that DAC and the Bipartisan Infrastructure Law present and how the DAC Hubs can facilitate a “just transition” for blue-collar workers from the fossil fuel industry.
I think one of the best things about the Bipartisan Infrastructure Law is it really contemplates the manufacturing side of this. We got to build these machines, we've got to figure out, hey, where's the steel coming from? What kind of rare materials do we need? What kind of new materials do we need? And that all adds up over a period of a couple of decades into building a significant industry that's not only going to employ construction workers, it's going to employ factory workers. It's going to employ transport workers.
The second panel focused squarely on some of the hard questions facing the implementation of DAC Hubs. The panel featured Kelly Cummins, the Acting Director of DOE’s Office of Clean Energy Demonstrations, Shuchi Talati, a Senior Visiting Scholar at Carbon 180, and Marcius Extavour, the Vice President for Energy & Climate at XPRIZE. The panel discussed the need to balance innovation with immediate scale-up at the hubs by pairing realistic risk expectations with support for technological diversity. They also discussed the importance of performing meaningful community engagement throughout the life of the hub projects.
We are going to try and measure risk at the portfolio level and not at the project level. We want to make sure that a failure of one project does not mean that we are not meeting our mission. In fact, we expect some failures. What we want to make sure is at the portfolio level we are getting closer to meeting our long-term goals
The third panel, “Business Models and Financing Challenges,” was moderated by former Rep. John Delaney and featured Jigar Shah, the Director of DOE’s Loan Program Office, along with Nan Ransohoff, the Head of Climate at Stripe, and Jay Dessy, a Director at Breakthrough Energy Catalyst. The speakers discussed the business opportunities and challenges associated with DAC deployment and the leadership role that the private sector has played in driving additional investments over the past year. There was a consensus that much more needs to be done and that, with additional policy signals and investments, there are tremendous environmental and business opportunities to be had from the Hubs.
A billion dollars does not a market make. I mean, that's a good step in the right direction, but if we're talking, you know, 6 billion tons of removal by 2050, at a hundred bucks a ton, that's $600 billion in customer revenue every single year that we are going to need to make this market.
The event concluded with a keynote by Sen. Bill Cassidy (R-LA), who spoke passionately about the impact of sea-level rise on Louisiana and the unique opportunities to manage and store carbon in his state.
I do think there is the opportunity to get something done on climate that is bipartisan because right now, there is clarity about the nexus between energy, the climate, the economy of a family and of a country and national security. And you can speak about it to the national security hawk in a way which is totally in agreement as to when you speak to the person who is a climate hawk.
It simply helps to have all the options on the table that we can. This administration has said that they want to get to a net zero power sector by 2035 and an economy by 2050. I cannot overstate how ambitious that is. And we see it just being really critical to have more technology options on the table than less.
There really is no carbon removal unless all of these [DOE] programs work together. The DAC hubs represent a certain kind of technology as Noah mentioned. But without storage, without a utilization program, without viable transport options, we can’t have a successful hub.
You asked what success looks like. Briefly, success looks like the hubs actually up and running, serving the various communities of practice and fully utilized. And, if not embraced, not rejected by local communities, hopefully after appropriate consultation and deliberative conversation process.
Unless we can scale these things successfully from a financial perspective, they'll never live up to their potential. And then secondly, unless we can scale them, they'll never be the innovation like we've seen in so many other markets where the private sector is the ultimate kind of cost reduction machine.
We still have to meet the absolute goal - Which is decarbonization of electricity grid by 2035 and decarbonization of the entire economy by 2050 - but be open to the fact that there are actually many paths to Nirvana.
The number one thing that we're looking for is a robust market for CO2 at a sufficient price to cover equity investment and provide some returns or cover the debt service. And so, it's really the quality of that revenue stream. That's what's critically important to enable success of investment at the project level.
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