The Economic Benefits of Direct Air Capture Hubs
The Department of Energy has announced two direct air capture hubs: the South Texas DAC Hub in Texas and Project Cypress in Louisiana. In this analysis, we quantify the economic and job benefits associated with these two announced DAC hub projects.
Direct air capture (DAC) is an important carbon dioxide removal technology that can help the US achieve deep decarbonization. The Infrastructure and Investment Jobs Act (IIJA) provided the Department of Energy (DOE) with funding for a range of DAC research and development efforts, including the Regional Direct Air Capture Hubs program, with a total of $3.5 billion for four commercial-scale DAC hubs. These hubs will provide valuable experience in deploying DAC at scale, allowing for an acceleration of DAC commercialization.
As of April 2024, DOE has announced two of the four DAC hubs: the South Texas DAC Hub in Texas and Project Cypress in Louisiana. In this analysis, we quantify the economic benefits associated with these two announced DAC hub projects. This analysis estimates the direct economic benefits, including private sector investment and employment opportunities associated with constructing and operating both DAC hubs, using Rhodium Group’s internally developed cost estimates and industry standard economic input-output models.
Each plant is expected to have 1 million metric tons of carbon capture capacity. The two plants have different investment costs, different energy input and performance estimates for their different technologies, and the South Texas Hub has an on-site solar installation. Accounting for these differences, our analysis finds the South Texas DAC Hub is associated with between 1,180 and 1,830 average annual jobs over a five-year construction period and 260 to 400 ongoing jobs to operate and maintain the hub. We find that Project Cypress is associated with between 840 and 1,500 average annual jobs over a five-year construction period and 240 to 450 ongoing jobs to operate and maintain the hub. While emission reductions are the most evident benefits of DAC hubs, this research highlights the in-state economic and employment opportunities that will also accompany these projects.
This nonpartisan, independent research was conducted with support from the Great Plains Institute (GPI). The results presented in this report reflect the views of the authors and not necessarily those of the supporting organization.