Climate Tech Notes

DAC Got Saved

April 25, 2026

On April 17, Energy Secretary Chris Wright told a congressional hearing that the Department of Energy would retain funding for two flagship Direct Air Capture hubs that had been under review since October. The South Texas DAC Hub, anchored by Occidental Petroleum, and Project Cypress in Louisiana, run by Heirloom, Climeworks, and Battelle, will keep their combined $1.2 billion in federal awards.

Most coverage has framed this as good news for climate tech. It is. But the more interesting story is why these two projects survived when other clean energy awards were cut, and what that says about how climate tech needs to position itself over the next 18 months.

What actually happened

In October 2025, the DOE put a large group of Biden-era awards under review. Some of those projects were eventually cancelled. The DAC hubs were not. Secretary Wright’s framing is the key part. He said the DOE backed projects that had a credible way to be helpful. He did not frame them around emissions reduction. He framed them around practical usefulness.

The pattern in the survivors

Three things stand out. First, the captured carbon has an industrial use case. Some of the CO2 is being directed toward synthetic jet fuel and other low-carbon fuels, which makes the projects easier to pitch as an energy security story rather than only a climate story.

Second, both projects are in red states with strong Republican political support. These are not abstract climate moonshots. They are industrial projects in places where local political support matters.

Third, the developers have strong ties to incumbent energy and industrial players. Occidental is one of the clearest examples of that. The bridge between climate technology and the existing energy economy is built directly into these projects.

What this means for climate tech investing

The message for founders and investors is uncomfortable but useful. Pure-play emissions reduction, with no industrial co-product, no security angle, and no incumbent partner, is going to be much harder to fund through this administration.

But climate technology that can be framed as energy security, domestic manufacturing, supply chain resilience, or industrial competitiveness has a clearer path. The same DAC technology that looked politically exposed in October became politically defensible in April once the fuel security story became stronger.

That makes framing more than a marketing choice. For a lot of climate companies right now, it looks closer to a survival question.

What I’m watching

I am watching whether the next round of DAC support follows the same pattern. If the next surviving projects are also in politically friendly geographies with industrial partners, then this starts to look like a real playbook rather than a one-off decision.

I am also watching what happens if the broader fuel security narrative weakens. The funding decision is one thing. Whether these projects keep enough political support to actually get built is another.

My take

I think the climate tech industry just got a useful, if unwelcome, lesson. The technologies most likely to survive policy whiplash are not always the ones with the cleanest climate logic. They are the ones with the most defensible second story.

That is not a celebration of the moment. It is a constraint to design around. Founders who internalize it early will have a better shot at raising capital and surviving. Founders who do not will spend more time trying to defend why their pitch still starts with carbon math alone.

This is a personal essay, not investment advice.