Legislation is driving international companies to set up camp within the US, and the EU won’t let that happen free of charge.
By Leah Garden
April 24, 2023
Switzerland-based Climeworks, a heavy hitter in the direct carbon capture space, officially confirmed its plans to expand into the United States. Taking advantage of the new economic opportunities supplied by the Bipartisan Infrastructure Law (BIL) and Inflation Reduction Act (IRA) , Climeworks applied to participate in three hubs (Louisiana, California and the Northern Great Plains) as part of the Department of Energy’s Regional Direct Air Capture Hubs program.
"The U.S. offers access to renewable energy infrastructure and advanced CO2 storage sites — something that is essential to realize DAC [direct air capture] projects that offer permanent carbon removal," said Jan Wurzbacher, co-founder and co-CEO of Climeworks, in a statement.
Climeworks intends to hire over 100 U.S.-based employees in "anticipation of several DAC projects focused on permanent carbon removal materializing." The company estimates that thousands of local jobs could emerge from these three hubs by 2030, ranging from project management to construction and manufacturing.
Meanwhile, the European Union passed the world’s first carbon import tax, the Carbon Border Adjustment Mechanism (CBAM). CBAM is meant to address what the EU calls carbon leakage, or the emissions created by EU-based companies’ carbon-intensive production abroad, in countries with less stringent emissions policies than the EU. CBAM will attach a tax for the emissions. Industries affected by the tax include iron, steel, aluminum, cement, fertilizers, electricity and hydrogen.
By charging an emissions tax for goods produced abroad, the EU is incentivizing regional production. While the law itself has been under negotiations for two years, predating the passage of the BIL and IRA, CBAM still serves as a firm clapback to the U.S.’s recent attempts to attra
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