Location
Washington D.C., DC, USA
Summary
The Carbon Dioxide Leadership Act (S. 3615 / H.R. 7054) is a federal legislation that would require the U.S. Department of Energy (DOE) to remove and store carbon dioxide emissions using direct air capture or other technology-based carbon removal solutions. Under a future program established by the law, the DOE may enter into long-term contracts to obtain these services. This would create an initial market and a strong investment signal for CDR projects.
The Federal CDRLA’s core policy components include:
1. Escalating annual CDR purchases. Requires the Secretary of Energy to remove a specific amount of carbon dioxide for each fiscal year, beginning in 2024. The following table lists the annual volume amounts (T/year), and the maximum $/ton that will be set for purchases. As volumes go up, $/Ton will go down.
2. Delivery schedule. Removal for a given fiscal year happen within three years of that fiscal year.
3. Small projects. requires that 20% of the total metric tons removed through fiscal year 2034 are removed by small removal projects, defined in subsection (k) as projects that remove less than 5% of the total removal requirement in that year.
4. Price ceiling. Dollar amounts for determining whether removal of carbon dioxide is economically feasible (See chart above for details). It also requires that monitoring, reporting, and verification (MRV) costs are included in this price. If the DOE enters into a multiyear contract the economic feasibility for the length of a contract will be based on the first year of the contract.
5. Funding category. Funds received through a contract shall not be considered Federal assistance or otherwise affect a carbon removal project’s eligibility for Federal assistance.
6. MRV. The DOE is directed to establish standards for monitoring, reporting and verification methods for carbon dioxide removals occurring under this program.
7. Multi-factor scoring criteria: The DOE is required to prioritize certain removal projects, including those that: minimize greenhouse gas emissions; support innovative CDR approaches, increase diversity of CDR technologies, provide for domestic job creation, support a just energy transition in fossil fuel communities, measure and mitigate impacts on environmental justice, the environment, and public health, and include robust public engagement.
8. Contract length: The DOE can enter into contracts with supplies for up to 15 years. The contract must require a contracted supplier to be responsible for any reversals of stored carbon dioxide.
9. Diversified supply. To the extent possible, the DOE will ensure that no supplier is responsible for more than 25% of the net metric tons of carbon dioxide removed under this program.
10. Reporting. The DOE is required to submit a report to Congress by January 1, 2027, and every two years thereafter on the implementation of this Act. The report must include amounts removed, associated costs, MRV methods, and impacts on environmental justice, the environment, public health, and labor.
