The United States has been a leader on innovating and deploying technologies that remove carbon dioxide (CO2) from the atmosphere. These range from using chemical sorbents and solvents to capture CO2 with direct air capture (DAC), to accelerating natural reactions that lock away CO2 in minerals, to increasing the ocean’s carbon sequestration capacity. Along with deep emissions reductions across all sectors, these carbon dioxide removal (CDR) approaches are critical to limiting temperature rise and mitigating the impacts of climate change.
Federal policies supporting CDR technologies have been foundational to U.S. leadership in this space. They have supported the full technology development process, from basic research to pilots and demonstrations to deployment. They’ve also supported enabling infrastructure, like CO2 sequestration and transport. Among CDR approaches, DAC has received the largest share of federal support. This has enabled the industry to grow from just a few companies less than ten years ago to around 150 today — more than half of which are headquartered in the U.S.
However, the federal government is now taking steps to freeze and roll back some of these funding streams, causing uncertainty around the future of landmark DAC projects and other CDR efforts in the country.
As the federal landscape shifts, states are positioned to advance DAC where it helps them meet their own goals. Federal investment in more than 100 DAC projects to date has helped lay the foundation for this, resulting in important technology diversification, learning and optimization that can be considered in different state contexts.
Many states already have policies and assets — including clean‑power portfolios, thermal‑energy resources and waste heat, and access to CO2 transport and storage — that DAC can leverage to accelerate progress toward net‑zero, attract private capital and skilled jobs, and improve grid and industrial efficiency. Recognizing the fiscal pressures states face, opportunities for infrastructure‑compatible deployments that minimize public outlay and fit within existing policy frameworks may be most feasible.
Federal Investments in CDR to Date
Over the past five years, the U.S. federal government enacted, authorized and funded a suite of policies and programs supporting CDR technologies and enabling infrastructure — principally through the 2021 Bipartisan Infrastructure Law, the 2022 Inflation Reduction Act and annual appropriations.
Table 1: Federal investments in CDR, 2021-2024
| Funding focus | Example policy support | Federal funding allocation |
|---|---|---|
| Research and development | Annual budget appropriations |
$118 M in FY 2024
|
| Demonstration | Regional DAC hubs program | $3.5 B for FY 2022-26 |
| CDR purchase pilot prize for government procurement of CDR | $35 M in FY 2023; $20 in FY 2024 | |
| DAC technology prizes |
$15 M: Pre-commercial Technology Prize $100 M: Commercial Technology Prize |
|
| Deployment | 45Q tax credit | Up to $180/tCO2 for carbon removal with DAC |
| CO2 transport | CO2 Infrastructure Finance and Innovation Act (CIFIA) program | $2.1 B for FY 2022-26 |
| CO2 storage | Carbon Storage Assurance Facility Enterprise (CarbonSAFE) for new and expanded carbon sequestration projects |
$2.5 B for FY 2022-26
|
| Funding for Class VI wells for geologic sequestration of CO2 |
$50 M for states to advance permitting and monitoring of Class VI wells $25 M for EPA to advance permitting process for Class VI wells |
|
| Overarching initiatives | Carbon Negative Shot | Funded mainly through annual budget appropriations |
| Responsible Carbon Management Initiative | Funded mainly through annual budget appropriations |
Notes: FY = fiscal year.
However, much of this federal support has since been frozen or is subject to proposed changes. For example, while final funding remains subject to Congressional appropriations, the FY2026 President’s Budget Request proposed consolidating CDR under DOE’s “Conversion and Value‑Added Products” program and reducing CDR funding from $70 million (enacted in FY2024) to $4 million.
In addition, H.R. 1, enacted in July 2025, reduces several clean‑energy tax provisions. Subsequent Treasury guidance further narrowed eligibility for some wind and solar projects. These changes can raise the cost or limit availability of low‑carbon electricity sources that many DAC systems depend on.
Types of DAC Technology that Have Received Federal Support
While a few DAC companies have been around for more than ten years, the majority of companies started in the last several years, leading to a wide range of technology types today.
Below are seven categories of DAC technologies that have received some type of federal funding across different stages of development. These are bucketed based on their technology type and energy demands, which dictate the possible energy sources that may be used to run them. To avoid confusion, we distinguish between electricity and heat as separate energy services.
Table 2: Summary of energy input buckets for DAC technologies
| DAC technology bucket | Typical temperature | Thermal energy resource examples | DAC application examples |
|---|---|---|---|
| 100% electric (no heat required) | Ambient-Moderate | N/A; energy comes from electricity only (grid electricity, renewable electricity like solar PV or wind) | Electrochemical DAC, alkalinity concentration swing (ACS), membrane separation, photo-active amines, zeolite-to-concrete |
| Thermal (very low-quality heat) + electric | <70 °C | Industrial waste heat (e.g., data centers, cement plants) | Zeolites, novel solvents, vacuum-swing adsorption DAC |
| Thermal (low-quality heat) + electric | 70-150 °C |
• Heat pumps • Concentrated solar thermal • Conventional geothermal • Conventional nuclear |
Amine-sorbent DAC, moderate-temperature sorbent regeneration |
| Thermal (medium-quality heat) + Electric | 150-300 °C |
• Conventional geothermal • Conventional nuclear • Concentrated solar thermal • Enhanced geothermal |
Sorbent DAC (regeneration temperature above 150°C) |
| Thermal (high-quality heat) + electric | 300-900+ °C |
• Concentrated solar thermal • Advanced nuclear • Renewable natural gas (with or without CCS) • CCS on natural gas • Oxyfired natural gas with CCS |
Calcium looping DAC (~900 °C), thermochemical DAC |
| Humidity swing | Ambient | N/A; energy comes from changes in humidity | Mechanical Tree |
| Plasma explicit systems | Highly localized (1,000-10,000 °C) | N/A; plasma reactors only need an electrical input | Plasma-assisted DAC |
Notes: See footnote (1)
Each of these DAC technologies has received federal support under various programs or funding streams. Most funding has been focused on technologies that require heat at 70-150 degrees C combined with electric energy, as these are what most DAC companies are developing.
Opportunities for DAC Deployment Across the US
This diversification of DAC technologies — ranging from 100% electric systems to options needing low‑, medium‑, or high‑temperature heat — can expand opportunities for deployment across the U.S., creating clearer opportunities to pair DAC with available resources (such as renewables, waste heat, geothermal or nuclear steam).
Fully electric DAC systems
Identifying regions with abundant low-carbon electricity and proximity to existing CO2 transport and storage infrastructure can pinpoint areas that are most suitable for immediate and near-term deployment of fully electric DAC systems. DAC delivers the greatest climate benefit when powered by low‑carbon electricity and, where applicable, low‑carbon heat (such as nuclear, geothermal or waste‑heat). This is in contrast to carbon-intensive power and heat sources, like unabated natural‑gas, which can reduce net removals. While concerns remain about scale of renewables deployment needed to support large-scale DAC, focusing near-term deployment in regions with existing low-carbon electricity can help reduce competition for clean power and maximize the net climate benefit.
The map below highlights state-level low‑carbon electricity generation. Because fully electric DAC draws from the regional grid, siting should be informed by average and marginal grid carbon intensities and deliverability — not just in‑state generation shares. However, state-level carbon intensity may be relevant for certain policy or reporting frameworks or projects looking to build new generation not connected to the grid.
Washington and Vermont stand out due to their high proportion of low-carbon electricity generation, primarily from hydropower and nuclear sources. An additional 24 states have enacted climate and energy targets, which are projected to further enhance their share of low-carbon electricity in the coming years.
DAC systems requiring thermal energy inputs
The next maps highlight favorable locations across the U.S. for deploying DAC systems that require thermal energy inputs. Low-carbon thermal energy is essential for many DAC technologies, particularly those in rows 2-5 of Table 2. This thermal energy can come from sources including geothermal, concentrated solar thermal, nuclear power and industrial waste heat.
For heat and power, prioritizing waste heat and curtailed power, dedicated additional supply, and only then shared grid supply, can help maximize system-wide climate benefits and ensure these resources aren’t being diverted from other beneficial uses. This matters because unabated fossil generation at the margin can erode net removals if DAC draws on a carbon-intensive grid. Conversely, waste heat, curtailment, or dedicated low‑carbon steam can deliver high net benefit with low system opportunity cost. To be able to draw power from curtailed electricity, a DAC plant would have to be located at the power production site.2
How States Can Leverage Their DAC Advantages
With federal support for CDR shrinking, states now have the opportunity to play a more active leadership role. Many states have established net-zero targets that explicitly or implicitly incorporate CDR. Some have also begun building or expanding infrastructure, policy frameworks and regulatory environments designed to support carbon capture and storage (CCS) from industrial emissions sources, which can enable CDR approaches like DAC. Other states are in the early stages of exploring opportunities in this area.
Below are four states as illustrative examples, examining how different types of DAC could theoretically leverage each state’s unique resources, infrastructure and policy landscapes.
Importantly, project developers also need to account for factors not explicitly covered here. These include environmental factors such as water availability and regional climatic conditions; social concerns, including local community perspectives and proximity to frontline communities; and the CO2 supply chain, including opportunities for CO2 utilization and transportation when geologic storage is limited, among others.
California
California has strong potential for DAC in select regions, given its abundant geothermal and solar‑thermal resources and strong climate policy framework. Realizing that potential will require careful attention to factors like water availability (some DAC systems use water, while others produce water); community siting; and CO2 transport and storage constraints.
California holds substantial potential for concentrated solar thermal and possesses some of the most significant geothermal resources in the country, particularly in the Imperial Valley in the southeast. Geothermal resources are ideal for integration with DAC technologies requiring heat inputs in the range of 70-150 degrees C. For instance, a promising DAC deployment strategy could involve medium-temperature DAC systems using geothermal heat in the Imperial Valley, with captured CO2 transported by rail to deep sedimentary geologic storage locations in Kern county (south-central California).
Additionally, northeastern California is home to a CarbonSAFE project near Modoc Plateau, aimed at injecting CO2 into basalt formations for permanent storage. And ultramafic rocks that react with and store CO2 are found in the foothills of the Sierra Nevada Mountains, offering alternative — though smaller-scale — opportunities for carbon storage through mineralization.
California’s robust policy environment further strengthens its DAC deployment potential. Historically a leader in climate policy, California continues to pioneer innovative policy approaches to CDR. State bill SB 643, passed in September 2025, creates $50 million competitive grant program explicitly for CDR — the first policy of its kind among U.S. states. California is also unique in having explicit quantitative targets for scaling CDR: 7 million tonnes of CO2 annually by 2030 and 75 million tonnes annually by 2045, as detailed in the state’s 2022 Scoping Plan. Additionally, it has established targets to achieve net-zero emissions and 100% renewable electricity by 2045, alongside a legally mandated economy-wide emissions reduction of at least 85% below 1990 levels by that year. This implies an important and clearly defined role for CDR in addressing residual emissions.
DAC is included in California’s Low Carbon Fuel Standard (LCFS), a regulation that incentivizes transportation fuel carbon intensity reductions and can support DAC projects both within and beyond state borders. California maintains a moratorium on new CO2 pipeline permits until the Pipeline and Hazardous Materials Safety Administration (PHMSA) updates federal safety standards. A draft rule posted in January 2025 was withdrawn before Federal Register publication, so near‑term DAC siting should assume non‑pipeline transport (such as rail) while the state pursues its own safety rulemaking. This underscores the state’s cautious yet proactive approach to scaling DAC deployment responsibly.
Texas
Texas hosts multiple energy resources that align with various DAC technologies. High‑temperature needs (300-900 degrees C) can be met at modular scale with renewable natural gas (RNG); systems needing 70-300 degrees C can draw on nuclear steam; DAC with heat requirements below 70 degrees C can use data‑center waste heat; and 100%‑electric pathways can tap wind and solar. Co‑siting with data centers is particularly attractive at today’s tens‑of‑thousands‑of‑tons project scale; DAC can use low‑grade heat and, with integrated heat exchange, may reduce facility cooling electricity.
Texas also leads the nation in renewable electricity production, primarily from wind power, with renewables currently representing nearly 30% of the state’s total electricity generation. Given this substantial capacity, Texas experiences significant renewable curtailment: Approximately 5% of wind and 9% of solar generation was curtailed in 2022, and these numbers will likely grow as new capacity comes online.3 All-electric DAC, or technologies requiring low temperatures, could effectively utilize this curtailed renewable energy. Using waste heat, curtailed power and dedicated “additional” supply before shared grid supply helps avoid crowding out other loads on the regional grid.
The state also boasts well-developed CO2 transport and storage infrastructure, including class VI wells, CarbonSAFE projects, and geologic formations highly favorable for CO2 storage.
Thanks to all of these factors, two of the world’s largest DAC projects are currently in development in Texas: the Stratos DAC project in west Texas and the South Texas DAC hub, which received funding through the federal DAC hubs program.
Texas has not established an overarching climate policy framework comparable to those in states like California. Its carbon‑management policies have historically centered on point‑source capture and CO2 handling in oil‑and‑gas contexts, including enhanced oil recovery (EOR). Maximizing climate mitigation requires durable carbon removal, such as dedicated geologic storage in Class VI wells and mineralization rather than EOR. The state is pursuing EPA primacy for Class VI wells and has built a permitting framework for CO2 storage, indicating supportive regulatory momentum for DAC at the project level and carbon removal technologies at the permitting level.
More broadly, existing incentives supporting industry and job growth in Texas can be leveraged to support DAC. For example, the state offers property tax abatements as a way to attract new industries and grants for companies that bring investment and jobs. These were not necessarily designed with DAC in mind but could support its deployment.
Washington
Washington state has one of the highest shares of low‑carbon electricity in the United States today, resulting in very low grid-carbon intensity. (Though it’s worth noting that most of this clean energy comes from hydropower and is becoming less reliable in the face of climate change.) Combined with significant geologic storage potential in the Columbia River basalts in the eastern part of the state, Washington is particularly well-suited for deploying DAC systems powered entirely by low-carbon electricity.
A 2013-2015 demonstration project, led by one of the Department of Energy’s national laboratories, successfully established the feasibility of CO2 storage in Columbia River basalt formations. And a CarbonSAFE project aimed at accelerating the commercial development of CO2 storage is currently advancing near the Columbia River. While continued federal grants for CDR projects are uncertain, critical regulatory processes — including EPA primacy approvals and Class VI permitting for CO2 injection wells — continue to move forward as of September 2025. This sustained regulatory progress provides essential government support for ongoing CarbonSAFE and DAC deployment efforts.
The Columbia River offers the added advantage of enabling CO2 transport via barge, which can help avoid challenges associated with CO2 pipelines, such as permitting delays and community opposition.
Moreover, Washington’s sole nuclear power plant, located directly upstream from the CarbonSAFE project, is planning a capacity expansion. This expansion presents an opportunity for DAC technologies requiring medium-quality heat (up to approximately 300 degrees C) to leverage nuclear waste heat that’s not being used elsewhere and which is typically released unused into the environment. Captured CO2 from such facilities could be efficiently transported downstream by barge for permanent storage at the nearby CarbonSAFE site.
Washington has set ambitious climate targets, including achieving 100% greenhouse gas emissions-free electricity by 2045 and reducing economy-wide emissions 95% below 1990 levels by 2050. CDR methods, including DAC, will play a crucial role in offsetting residual emissions to meet these goals. The state government has already published recommendations on how to increase Washington’s CDR capacity.
Massachusetts
Massachusetts may not appear ideal for large-scale DAC deployment. It lacks in-state geology for Class VI injection, dedicated CO2 pipelines and abundant thermal energy resources. However, the state possesses a relatively clean electricity grid, a flourishing innovation ecosystem and a forward-thinking policy landscape that make it well-suited for exploring advanced DAC and CO2 utilization pathways.
In 2023, Massachusetts’s in-state electricity generation was approximately 63% from natural gas and 34% from renewables (including solar, hydro and biomass). However, about half of all consumed power was low-carbon, thanks in large part to hydropower imported from Canada. Solar capacity saw major growth — over 4,300 MW of total installed capacity by late 2023- and ambitious offshore wind projects are underway, suggesting continued grid decarbonization. However, recent federal actions may stall progress on these fronts.
Beyond grid power, Massachusetts hosts a cluster of data centers — including the Massachusetts Green High Performance Computing Center in Holyoke, which draws over 90% clean power. Data centers in the state generate large amounts of low-grade waste heat (typically 25-60 degrees C), which presents substantial opportunity for reuse through heat-recovery networks. While the U.S. has lagged behind Europe in implementing such systems, Massachusetts is among eight states exploring policies to enable thermal energy networks to harness data center heat. Capturing this waste heat could benefit DAC systems optimized for thermal energy up to 150 degrees C, where modest temperature inputs -potentially boosted via heat pumps — support CO2 capture processes using ambient or district-level heat.
Massachusetts policy actively supports carbon removal: The state’s Clean Energy and Climate Plan for 2050 mandates economy-wide net-zero emissions and integrates CDR as a key strategy. Along with increasing carbon sequestration on natural and working lands, the Plan recognizes the importance of diverse engineered CDR approaches.
Two important pieces of legislation passed in 2024 that made CDR, including DAC, eligible for a range of incentives. First, CDR was added to the state’s definition of clean energy (or “climatetech”) projects, making it eligible under H.5100 for state climatetech grants. Second, S.2967 directs state agencies to make policy recommendations for carbon removal — including DAC with mineralization — and establishes embodied-carbon procurement standards.
Additionally, the Carbon Dioxide Removal Leadership Act (S.2096) introduced in 2023 proposed establishing a competitive, state-managed CDR procurement program emphasizing community co-benefits and lifecycle CO2 integrity. While it didn’t advance, it indicated early interest from the state and could be taken up in the policy roadmap.
Overall, while Massachusetts may not scale DAC via underground storage, it shines as a testbed, combining clean energy, data center waste-heat reuse, carbon utilization pathways and progressive state policies. The result is a dynamic launchpad for next-generation DAC technologies, particularly those centered on CO2 as a construction material or waste-heat-driven capture.
What’s Next for Carbon Removal in the US?
Understanding the range of CDR options available to counterbalance emissions that cannot be reduced will be critical to achieving states’ net-zero targets. DAC provides one option which — thanks to its growing array of technologies with varying energy requirements — is well suited to different resource and infrastructure availability. Even states that are not yet committed to net zero can find ways to integrate DAC with existing industry. As the federal funding landscape for CDR shifts, leveraging these technologies in a way that supports states’ climate and economic development goals is more important than ever.
1 All types of DAC need electricity for non‑heating loads — for example, pumps, vacuums, CO2 compression, and controls — and can be connected to the grid or other sources of low-carbon electricity. The first bucket is all electric with no heat requirements. The next four DAC technologies need both thermal and electrical energy for operation and are classified based on the typical temperature requirement, which dictates the heat sources that may be used. “Heat” means a delivered thermal stream (e.g., steam or another working fluid) at a target temperature. Some of these have a fully electrified heating component, which can connect to the grid or other sources of low-carbon electricity. The last two buckets are unique in their energy inputs: Humidity swing DAC uses changes in humidity (due to potential siting in very arid regions, such as Arizona) to capture ambient CO2 and then release it for sequestration. Plasma-assisted DAC, which is at a very early development stage, uses plasma reactors to capture CO2, which enables CO2 release at ambient temperature and pressure, potentially lowering energy requirements.
2 The cost of deploying such systems will depend on the availability of the curtailed power for the DAC plant, and the efficiency and cost penalty of turning the DAC system on and off.
3 Curtailments happen year-round, but mostly between February and June in Texas, and are due to excess production of renewable electricity relative to the demand, and limited grid transmission capacity.