Washington D.C., DC, USA


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.

Politics Note

The Carbon Dioxide Removal Leadership Act was originally introduced in 2022 (117th Congress) by Rep. Paul Tonko (NY-20) and Rep. Scott Peters (CA-52) in the House of Representatives. A companion bill was introduced shortly thereafter in the U.S. Senate by Senators Chris Coons (DE) and Sheldon Whitehouse (RI). This bill did not progress to committee during the 117th Congress. The second iteration of the bill (S. 3615 / H.R. 7054) was introduced in January 2024 by the same original sponsors in both chambers.

Replicability & Adaptation Potential

CDR procurement policies among the most replicable demand-support options that federal, state and even local governments can adopt. There are a few factors supporting this: Flexible scale and duration - Procurement orders can be set at any level of volume, and authorized for either prescribed periods, or indefinitely. This allows procurement to be calibrated to different levels of ambition and readiness to serve a range of policy objectives that match the goals of a specific jurisdiction. For example, procurement can be implemented as a pilot to allow states to gain valuable experience in assessing and comparing a range of CDR supply options, selection and assessment standards, and to support first-of-kind projects within that can be leveraged to build deeper acceptance and support among different constituencies. Pilots create a structured occasion for learning and capacity building within the state, which can then inform subsequent policies that aim for greater impact over a longer term. Alternatively, procurement programs can function as a core, long-term carbon removal support mechanism. For example, CDR procurement can be scoped to align directly with net-zero policies, as an integrated element that parallels decarbonization investments, closing the gap between emissions avoidance and net-zero. Centralized state control and oversight - A procurement model limits the range of actors responsible for management and implementation, centralizing functions within one or more state departments. While difficulties arise related to capacity to deliver, such centralization reduces administrative complexity and oversight compared to models that compel private sector emitters to purchase carbon removals. A secondary advantage of state-administered procurement is that it allows the government more control over selection criteria, allowing for co-benefits and economic development that support the public good more generally to weigh more heavily in the assessment and selection of projects. Government procurement approaches can also dictate where projects must be located, meaning that a program can require that supported projects must be located within the national, state or local jurisdiction. This prerogative can help bolster economic and other co-beneficial project outcomes within a local context, strengthening the justification for constituents and the elected officials who represent them. Political advantages. Political Obligation-based demand support approaches, which require polluters to purchase carbon removals, can present considerable political challenges to adoption, and offer face direct resistance from powerful interests who oppose them. Procurement programs, to be sure, must be funded one way or another, but the total cost of program implementation can be met through a variety of public revenue sources, and distributed across sources to lower the impact on any given group of segment.