DOE Cancels $7.5B in Climate Project Funding, Sparking Concerns and Relocations
The U.S. Department of Energy (DOE) has cancelled $7.56 billion worth of awards for 223 climate- and energy-related projects. The move follows a review finding that the approved initiatives did not adequately advance the nation's energy needs and were not economically viable. The decision has raised concerns about the future of climate tech companies in the U.S.
The cancelled awards were issued by various DOE offices, including Clean Energy Demonstrations, Energy Efficiency and Renewable Energy, Grid Deployment, Manufacturing and Energy Supply Chains, Advanced Research Projects Agency-Energy, and Fossil Energy. Among the terminated projects were several direct air capture (DAC) hubs and carbon capture and storage solutions aimed at supporting large-scale decarbonization and sustainable energy projects.
Latitude has released a complete list of initiatives with terminated funding. Meanwhile, CarbonCapture Inc. has decided to move its Tamarack DAC project from Arizona to Alberta, Canada due to more favorable environmental conditions for climate projects. Despite the setback, the carbon removal industry is forecasted to be worth more than a trillion dollars in the coming decades, according to analysis from McKinsey. Other countries like Canada are focused on utilizing natural resources and progressive policies to encourage and foster local climate tech proliferation.
While the DOE's decision has cast uncertainty over U.S. climate tech companies, certain technologies continue to receive funding. For instance, hydropower technology upgrades, such as Andritz hydroelectric projects in Austria, and smart farming innovations supported by German federal ministries, remain active. Brandenburg, Germany, also continues to be involved in energy transition projects with EU and national funding support.
The cancellation of $7.56 billion in climate and energy project funding by the U.S. Department of Energy has raised concerns about the future of climate tech companies in the U.S. While the decision may push some innovators to relocate elsewhere, threatening U.S. leadership in climate tech, other countries like Canada are actively pursuing climate tech projects. Despite the uncertainty, certain technologies continue to receive funding and progress, demonstrating the ongoing global commitment to climate solutions.
