This article is part of our President’s FY2025 Budget Request Coverage. Visit our Rolling Analysis Page for more.

The Administration is continuing its commitment to CCS in FY2025. The Department of Energy’s (DOE) Fossil Energy and Carbon Management (FECM) office, and the Carbon Capture and Sequestration (CCS) programs in it, are funded at levels in line with last year’s budget request and with the fiscal year (FY) 2023 enacted levels.

FECM conducts research, development, demonstration, and deployment to “advance technologies to reduce carbon emissions and other environmental impacts from energy production and industrial processes,” with a notable focus on CCS technologies. The budget request of $900 million for FECM is on par with the FY24 budget request ($905 million) and FY23 enacted funding ($890 million). 

CCS programs within FECM include Point-Source Carbon Capture, Carbon Dioxide Removal, Carbon Conversion, Carbon Transport & Storage, and Hydrogen with Carbon Management. Combined, the Administration’s budget request for these program areas is a 7% decrease from both the FY24 request and FY23 enacted levels.  

Fossil Energy and Carbon Management CCS Funding ($, thousands) 

It is also important to note that the FY25 budget request does not reflect the massive funding for CCS included in the Infrastructure Investment and Jobs Act (IIJA, P.L. 117-58). The IIJA appropriated more than $12 billion to FECM and other DOE programs for federal spending on CCS technology.  

Infrastructure Investment and Jobs Act CCS Funding ($, thousands) 

CCS is also funded elsewhere across DOE, such as in the Office of Clean Energy Demonstrations (OCED). OCED funds CCS demonstration projects, as well as projects for hydrogen, advanced nuclear reactors, renewable energy, energy storage, and industrial decarbonization. The office oversees many of the CCS programs created and funded in the IIJA. The budget requests $180 million for OCED, which is more than double what the office was funded in FY23 but a 16% decrease from last year’s budget request. 

The U.S. federal government subsidizes the CCS industry at every step— including federal funding of research, taxpayer-backed loans to finance CCS commercial projects, and the carbon capture and sequestration tax credit. Yet even with significant federal support, constructing and operating capture technologies continues to remain prohibitively expensive, especially compared to other climate mitigation strategies. Furthermore, federal management of existing CCS programs and subsidies has had a poor track record, wasting hundreds of millions of taxpayer dollars. 

According to the Government Accountability Office, DOE awarded 11 CCS demonstration projects a combined total of $1.1 billion but only 3 projects were completed, at least partially due to DOE mismanagement. The 45Q tax credit has also been vulnerable to abuse; the Treasury Department’s Inspector General for Tax Administration found that $894 million worth of credits claimed between 2010 and 2019 did not comply with Environmental Protection Agency (EPA) monitoring, reporting and verification requirements for sequestered carbon. The FY25 budget estimates that the 45Q tax credit would cost taxpayers $36 billion over FY24-FY33. Taxpayers are being exposed to a great financial risk if the oversight and accountability of 45Q remains unaddressed.   

As the Administration plans to continue to spend billions of taxpayer dollars on CCS, taxpayers deserve increased oversight, accountability, and transparency.