Oxy DAC subsdiary gets $500m DOE loan

1PointFive, a wholly owned subsidiary of Occidental, announced today that the U.S. Department of Energy’s Office of Clean Energy Demonstrations (OCED) will provide up to $500 million to support the development of the South Texas Direct Air Capture (DAC) Hub.

The award is a milestone in furthering commercial-scale DAC in the United States and validation of Occidental and 1PointFive’s ability to use their decades-long expertise in carbon management to accelerate the vital climate technology.

The funding will be provided in multiple tranches, according to a news release. The initial award of $50 million will advance 1PointFive’s ongoing work at the South Texas DAC Hub. Upcoming activities include engineering, permitting, the procurement of long-lead equipment and continued community engagement to further 1PointFive’s community benefits plan. The total award value for the South Texas DAC Hub is expected to be up to $500 million for the initial DAC facility at the site, and potentially increased up to $650 million for the development of an expanded regional carbon network in South Texas.

“Large-scale Direct Air Capture is one of the most important technologies that will help organizations and society achieve their net zero goals,” said President and CEO Vicki Hollub, Occidental. “This award demonstrates how the U.S. Department of Energy is committed to realizing the full potential of DAC and its confidence in the South Texas DAC Hub to deliver CO₂ removal at a climate-relevant scale.”

1PointFive’s South Texas DAC Hub, located on the King Ranch in Kleberg County, Texas, will host a DAC facility with an initial removal capacity of 500,000 metric tons of CO₂ per year with a plan to develop a build-out to over 1 million metric tons per year in the future. The site has the capacity to expand up to 30 million metric tons of CO₂ removal per year through DAC and securely store up to 3 billion metric tons of CO₂ in saline formations.

As a part of the hub’s development, 1PointFive is also advancing programs to support the South Texas region through its Community Benefits Plan. The plan is focused on providing opportunities for local hiring, workforce development and educational initiatives.