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Let’s Get Excited About DAC Hubs

Right now, there are fewer than 10,000 tons of Direct Air Capture (DAC) capacity across the globe. This is just a drop in the bucket compared to where we need to be in 2030. There is a pressing need to bring down the costs of capturing CO2, and robust federal funding for regional DAC hubs is a great way to create economies of scale, promote development from shared infrastructure, and foster innovation through learning-by-doing.

The bipartisan infrastructure package, which passed the Senate as the Infrastructure Investment and Jobs Act (IIJA) with 69 votes, includes many important infrastructure-related investments that were outlined in the first and second posts of this blog series. One noteworthy provision is the inclusion of $3.5 billion over the next 5 years to establish 4 regional DAC hubs. Each hub will have the capacity to capture at least 1 million metric tons of CO2 each year and the necessary infrastructure to transport and either sequester or utilize the captured CO2.

The exact locations for the 4 regional DAC hubs have not yet been announced, but there are several qualities that make the “hubs” model an attractive policy design for deployment.

First, shared knowledge. There are only a handful of commercial DAC companies in the world and a few hundred people with the technical knowledge required to design and run a DAC facility. By definition, a DAC hub will amalgamate some of the foremost experts on the subject to increase deployment and improve the technology. The Department of Energy already utilizes the hub model for its 5 Energy Innovation Hubs, and the Apollo Missions, the Manhattan Project, and Bell Laboratories provide historical examples of when innovation hubs led to massive technological advances. Bell Laboratories was designed to encourage interaction between scientists from different disciplines with the aim of converting shared knowledge into innovation. The same approach applies to regional DAC hubs, which can promote innovation through collaboration from leading scientists.

Second, shared infrastructure. Capturing CO2 is only part of the battle; a regional DAC hub must also have the transportation infrastructure to connect sources of CO2 to either geological storage sites or facilities that utilize CO2. Currently, there are around 4,500 miles of CO2 pipelines in the United States, and most of them are located near oil fields where CO2 is used for Enhanced Oil Recovery. The IIJA takes a holistic approach that focuses on building a CO2 ecosystem with capture, transportation, sequestration, and utilization infrastructure. These activities are inherently interrelated, so building more DAC capacity will also provide economies of scale and learning-by-doing for downstream activities.

Third, economic development. The supply chains for building commercial DAC plants are still quite nascent, and the quick scale up to over 4 million tons of annual DAC capacity will stimulate mass manufacturing of the necessary materials and encourage fast innovation cycles. The bipartisan package prioritizes projects that maximize scalability, geographic diversity, and long-term employment opportunities. Importantly, it stresses the need to build at least 2 DAC hubs in fossil fuel producing regions where communities are most likely to be affected by the clean energy transition. Luckily, many of the skills employed by the oil and gas industry are valuable for capturing, transporting, storing, and utilizing CO2.

The formation of 4 regional DAC hubs will certainly make the United States an early leader in DAC and allows for an even greater scale up by midcentury. Moreover, the hubs model is applicable beyond just DAC; IIJA appropriates $8 billion to build at least 4 regional clean hydrogen hubs. Ultimately, the bill is a huge climate win and a big first step toward deploying at least 7 million tons of annual DAC capacity by 2030—a target that is outlined in the BPC’s DAC Advisory Council report on “The Case for Federal Support to Advance Direct Air Capture.”

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