It was the hottest thing in climate tech. Now it's trapped in the valley of death

"Project Cypress, a massive undertaking in Louisiana designed to capture more than a million tons of CO2 each year, won $50 million in funding from the Department of Energy in early 2024. In Texas, another major direct air capture hub also won funding. Together, the projects were eligible for as much as $1.1 billion from the DOE, part of $3.5 billion Congress set aside for DAC hubs in the 2021 Bipartisan Infrastructure Law."

"Climeworks, a pioneer in the industry and one of the partners on the Louisiana project, was hiring a U.S. team, scaling up a new plant in Iceland, and signing large deals to sell carbon removal to companies like British Airways and Morgan Stanley. Heirloom, another tech company working on the Louisiana hub, closed a $150 million Series B round of funding. CarbonCapture, another startup in the space, raised $80 million. Multiple other DAC projects also won DOE grants."

Direct air capture technology aimed at pulling CO2 from the atmosphere won major U.S. funding and private investment, including Project Cypress's $50 million DOE award and eligibility for $1.1 billion for hubs. Companies such as Climeworks, Heirloom, and CarbonCapture expanded operations, raised capital, and signed commercial deals. Recent leaked lists indicate the DOE may revoke about $50 million in grants and possibly defund flagship hubs, prompting layoffs and canceled projects. Some projects continue and a key tax credit remains available. The industry remains in a funding-sensitive valley of death, and federal cuts could slow domestic and global deployment.

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