The Chips Act has a carbon dioxide removal Easter egg

While the $280 billion Chips Act is largely focused on bolstering the U.S. semiconductor industry, it could also be a game changer for carbon dioxide removal. Buried within the sprawling bill is an authorization for research into the technology that, while not proven at scale, could nevertheless play an important role in addressing climate change.

The bill calls for $1 billion for carbon removal research, development and demonstration by the Department of Energy’s Office of Fossil Energy and Carbon Management over four years. That would more than double the department’s authorized investment in CDR, which currently stands at $209 million over four years, according to Rory Jacobson, deputy director of policy at the NGO Carbon180. He called the boost “historic.”

Both the House and Senate passed the Chips Act last week, and President Joe Biden is expected to sign it into law next week.

While the bill does not actually appropriate the funding — that would have to come in a reconciliation bill or in the annual appropriations process — Jessie Stolark, public policy and member relations manager for the bipartisan advocacy organization the Carbon Capture Coalition, said the authorization itself is “very significant."

“It's really exciting to see that kind of momentum coming from Congress,” Stolark said, as well as “this bipartisan recognition of the role that carbon dioxide removal and specifically direct air capture is going to play in meeting mid-century climate goals.”

The DOE’s existing CDR research program is the product of the 2020 Energy Act; it was designed to improve and scale CDR technologies to the point where they can help the U.S. meet its long-term goal of net zero emissions by 2050.

The Inflation Reduction Act could further alter the CDR landscape. The bill includes $369 billion set aside to fund climate initiatives. Among them are changes to the 45Q tax credit for carbon sequestration that would lower the threshold for the amount of carbon a project removes to qualify and other tweaks to help projects to capture carbon at the source or directly from the air get off the ground.

The tech industry has also plunged money into CDR technology, including purchasing removal services from a growing number of startups. Yet these purchases only amount to a few thousand tons of carbon being removed from the atmosphere per year.

The Intergovernmental Panel on Climate Change’s latest report devoted a chapter to CDR, calling it a “necessary element” for reaching net zero. Ultimately, most estimates indicate the world will need to remove billions of tons annually to keep global warming to relatively safe levels, though just how many billions will depend on actions taken today to end the use of fossil fuels and transition to renewables.

Correction: This story has been updated to correct part of Jessie Stolark's title and better describe the Carbon Capture Coalition. This update was made Aug. 4, 2022.