Boosting CDR Innovation Through the Inflation Reduction Act

There’s no doubt that the Inflation Reduction Act (IRA) is the broadest, most expansive climate bill ever passed by the US government. At $369 billion over 10 years, it funds some of our most urgent climate priorities.

Most of the objectives in the IRA are rooted in an old paradigm: “If only we can stop pumping more greenhouse gasses into the atmosphere, everything will be ok.” Unfortunately, that ship has sailed, and we now must do much more than curb emissions in order to ensure a climate in which future generations can survive and flourish. Don’t get me wrong, we absolutely need to fully transition to clean energy sources, and we are pleased that the IRA focuses on much-needed mitigation efforts. But, in order to return to proven-safe levels of atmospheric CO2 and reverse climate change, we must commit to climate restoration in conjunction with mitigation.

With this in mind, we at the Foundation for Climate Restoration (F4CR) are happy to see some focus on carbon dioxide removal (CDR) in the IRA. One promising area of CDR explicitly mentioned in the IRA is the use of CO2 as an input in construction materials like concrete, which is otherwise a “hard-to-abate” product. The IRA provides $100M for the Environmental Protection Agency to identify and label low-embodied carbon construction materials and products. It is our hope that a consistent and transparent labeling system like this will incentivize the widespread adoption of climate-friendly materials that turn concrete from a major source of CO2 emissions — responsible for 8% of global emissions — into a carbon sink (i.e., a means of safely storing atmospheric carbon).

We were also pleased to see reference to greenhouse gas removal (GGR), which includes the removal of harmful greenhouse gasses like methane in addition to CO2. Most GGR solutions are new to the marketplace or are still being researched and developed. When these solutions are ready to be scaled, they will need the kind of government support provided to the solar industry starting in the 1980s and to the fossil fuel industry for the past century.

One GGR solution that gets a lot of love in the IRA is Direct Air Capture (DAC).* A credit of up to $180 per metric ton of carbon removed through DAC will further incentivize innovation and efficiency as DAC technology emerges from its infancy. Importantly, these DAC credits focus on where the removed carbon will be stored, like in geologic formations or in oil and gas fields. To be a viable climate restoration solution, carbon must be sequestered safely for at least 100 years, but preferably for over 1,000.

*Interested in learning more about Direct Air Capture? Check out our 1-minute animated explainer video and white paper from F4CR’s Solution Series.

As DAC and other GGR methods scale, thanks in large part to this new support from the federal government, it is essential that carbon removal is not used as a justification for ongoing carbon emissions. Carbon removal will only be effective in restoring the climate if it is done in tandem with urgent and comprehensive emissions reduction and elimination.

And finally, we are glad to see that over 40% of the $27B investment in the EPA’s climate change projects will go to low-income and disadvantaged communities. This will connect these communities with financing for emissions-reduction projects, but other equity issues remain, namely the exclusion of disadvantaged groups from the discussions leading up to the creation and passage of the IRA bill.** It is also worth noting that the 40% is slated for emissions reduction only and does not address the significant climate pollution that already affects these low-income communities. Additionally, it is unclear how the benefits of these new investments will be equitably distributed to the groups who have been most — and longest — impacted by climate change.

**Wondering how equity fits into climate restoration? Read our recent white paper “Equity as the Fourth Principle of Climate Restoration

So, while the IRA is a significant legislative achievement in many ways, we must all stay vigilant and not become complacent. Restoring the climate will require more than one bill. We — you, I, and other climate restorers around the world — must embrace the opportunity and momentum created by the IRA to push for more investment, greater ambition, and an unwavering commitment to equitable processes in future climate legislation.

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Foundation for Climate Restoration

Foundation for Climate Restoration

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The Foundation for Climate Restoration (F4CR) is a nonprofit whose mission is to catalyze action to restore a safe and healthy climate by 2050.