DOE Unlocks $100M Incentive for Products Made From Carbon Emissions

August 08, 2023 by Shannon Cuthrell

The U.S. Department of Energy has announced a $100 million grant program to incentivize states, local governments, and utilities to purchase products derived from captured carbon emissions. 

The U.S. Department of Energy is allocating $100 million to cover purchases of products derived from converted carbon emissions. The funding will be available to states, local governments, and public utilities. 


Smokestack emissions from industrial exhaust pipes

Smokestack emissions from industrial exhaust pipes. Image used courtesy of Pexels/by Chris LeBoutillier

Carbon Management

The Carbon Utilization Procurement Grant will supplement half the cost of procuring and deploying products developed through converting captured carbon dioxide (CO2) and carbon monoxide emissions. It also aims to deploy sustainable product alternatives that reduce net greenhouse gas (GHG) emissions. 

By offering this new funding channel, the DOE hopes to accelerate the adoption of advanced carbon management technologies, supporting a market for sustainable fuels, chemicals, and building materials originally sourced from industrial facilities and power plants. 

Carbon capture is a relatively nascent market that includes a range of applications in which CO2 is captured and directly used. Today, it’s mainly used in the fertilizer industry and for enhanced oil recovery. Utilization involves using the CO2 directly or transforming it into products such as synthetic fuels, chemicals, and building aggregates. According to the International Energy Agency, these three uses have spurred a global project pipeline capable of capturing 10 million tonnes (Mt) of CO2 annually by 2030. Synthetic fuel production claims most of that total, at 7 Mt annually. 

The four-year program will deliver 200 awards ranging from $50,000 to $500,000 each. The DOE anticipates making 50 awards annually through 2026. The funding opportunity closes on April 30, 2024. 


An overview of the Carbon Utilization Procurement Grant program timeline and award details

An overview of the Carbon Utilization Procurement Grant program timeline and award details. Image used courtesy of DOE (page 20 of the FOA)

The program is funded by the Bipartisan Infrastructure Law, signed in 2021. The legislation appropriates over $62 billion in funding to DOE for clean energy-related projects


Carbon Conversion Products

The awards require a 50% cost-share commitment from the awardees. The funding opportunity announcement (FOA) specifies that the program targets products derived from anthropogenic carbon oxides—defined as CO2 or carbon monoxide emissions concentrated through human activity such as power and industrial operations. This also includes legacy emissions already existing in the atmosphere that have been concentrated through capture technologies like direct air capture

The commercial or industrial carbon conversion products must provide a “significant” net reduction in GHG emissions over existing products to qualify. This standard will be applied through a life cycle analysis (LCA) process overseen by the DOE’s National Energy Technology Laboratory. 

To receive up to $3 million in funding, individual vendors must demonstrate that their emissions-derived product can yield at least a 10% reduction in GHG emissions compared to incumbent products. However, vendors could receive more funding for showing a 25% reduction over the incumbent baseline. 


An overview of the life cycle analysis guidelines for carbon dioxide source types

An overview of the life cycle analysis guidelines for carbon dioxide source types, including power plants, industrial plants, and direct air capture sources. Image used courtesy of National Energy Technology Laboratory (page 7)

Overall, the program ostensibly aims to boost the still-nascent market for sustainable alternatives—including chemicals, fuels, building materials, and other carbon conversion products—with lower life-cycle CO2 emissions than conventional products. 

The program is managed by DOE’s Office of Fossil Energy and Carbon Management (FEMC), which currently has several other funding opportunities related to sustainability and carbon management. Excluding Carbon Utilization Procurement Grants, FEMC’s other open programs total $198.9 million.