The United States Department of Energy has announced a groundbreaking $1.2B USD in new funding for carbon reduction.

In a move that aims to reduce climate change, the US government plans to focus the funds on carbon removal projects.

‍How it works:‍

• Greenhouse gases, which warm the planet, can be reduced via what are known as direct air capture machines
  
• Direct air capture uses large fans to draw in air and then traps carbon dioxide molecules using chemical solutions
  
• Direct air capture is different from carbon capture, which focuses on trapping emissions before they leave a manufacturing facility
  
• The carbon monoxide from direct air capture is then typically stored deep underground or reused for materials such as low carbon cement
  

Why it matters:‍

• In order to move towards net zero emissions, carbon reduction and carbon removal are both critical components
  
• This new government funding will incentivize entrepreneurial ventures around carbon reduction, specifically in new technologies and infrastructure
  

The challenge:‍

• The costs around carbon removal are still enormous, so more government funding is likely needed
  
• While some carbon can be used in things such as fuels and cement, there is simply far too much carbon dioxide being captured out of the atmosphere to have it all be reusable in materials or products
  
• As a consequence, it is expected that governments may need to also become purchasers of carbon removal in order to reach net zero emissions
  
• With a lack of commercial value in carbon removal, it is unclear if the carbon removal space could ever exist without government credits and funding

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