NEW ORLEANS - As major private sector companies forge ahead with Carbon Capture projects, continued federal funding for them is in question.
Microsoft’s $800 million investment in Louisiana
Microsoft has entered into a groundbreaking agreement with AtmosClear, a subsidiary of Fidelis New Energy, to support the development of the world’s largest permanent carbon removal project in Louisiana. The 15-year contract announced on April 15 aims to remove 6.75 million metric tons of carbon dioxide using Bioenergy with Carbon Capture and Storage (BECCS) technology.
The facility is to be constructed at the Port of Greater Baton Rouge and will utilize sustainable biomass sources, such as sugarcane bagasse and forest trimmings, to generate energy. The carbon dioxide produced during this process will be captured and stored underground, ensuring its permanent removal from the atmosphere. Construction is scheduled to begin in 2026, with operations expected to commence in 2029.
The project represents an investment exceeding $800 million and is anticipated to create approximately 600 construction jobs and 75 permanent positions. It also aims to revitalize the local forestry sector, which has been affected by the recent closure of the International Paper Red River Mill in Campti, Louisiana.
Impact of Trump Administration
The AtmosClear initiative aligns with Microsoft’s goal to become carbon negative by 2030, but the project is reliant on U.S. federal 45Q tax credit, which offers $85 per ton of sequestered carbon. The current administration is considering scaling back or repealing decarbonization support.
The Direct Air Capture (DAC) hub in Calcasieu Parish is also under threat if the federal government removes funding. DAC is part of Project Cypress, a major carbon removal initiative currently supported by the U.S. Department of Energy (DOE). The project aims to capture over 1 million metric tons of CO₂ annually directly from the atmosphere and store it permanently underground.
The Project Cypress initiative has two facilities:
- Cypress Southwest in Calcasieu Parish using Climeworks' DAC technology.
- Cypress Northwest in Caddo Parish using Heirloom Carbon Technologies.
The DOE has committed over $50 million to Project Cypress, with up to $600 million in total funding now under threat from the new administration.
Strong private sector support
A recent global poll of nearly 1,500 business executives conducted by Savanta indicates strong support for investing in renewable energy. The survey was commissioned by E3G, Beyond Fossil Fuels, and the We Mean Business Coalition. It gathered responses from executives across 15 major economies and emerging markets, including the United States, United Kingdom, Germany, India, and Brazil.
Key findings from the poll include:
- 97% of executives support transitioning away from fossil fuels to renewable energy sources.
- 78% advocate for achieving a renewables-based electricity system within the next decade.
- 93% of organizations are considering investing in on-site renewable energy solutions to support their operations.
- 90% of business leaders consider access to renewable electricity a top priority when deciding where to invest.
Over half of the surveyed companies plan to relocate operations or shift supply chains within five years to access greener energy sources, with this number increasing to 89% over the next decade.
Current Status of Carbon Capture in Louisiana
On April 29, the Louisiana House Committee on Natural Resources and Environment considered ten bills related to carbon capture and storage (CCS). Of these, eight were rejected, one was deferred, and only Senate Bill 73 advanced.
Senate Bill 73 mandates that Louisiana's Commissioner of Conservation give "substantial consideration" to local government input during public hearings and comment periods for carbon dioxide sequestration projects to enhance community involvement in the permitting process for carbon capture and storage initiatives.
The failed bills aimed to increase local control over CCS projects, restrict the use of eminent domain for CO₂ pipelines, impose stricter safety and liability requirements, and implement a moratorium on new CCS developments. These proposals faced opposition from industry groups and state economic officials, who argued that such measures would hinder significant investments and job creation associated with CCS technology in Louisiana.
Tommy Faucheux, president, Louisiana Mid-Continent Oil & Gas Association (LMOGA), issued a statement on the outcome.
“The bills that failed were bad for Louisiana, stifling opportunity with reams of red tape,” Faucheux said. “CCS is an important part of the future of Louisiana's energy industry, which generates 25% of our state's economy. LMOGA will continue to advocate for legislation that creates opportunity and delivers on the promise to fuel America's energy independence with Louisiana innovations.”
Other Major Projects Already Underway
Louisiana has attracted approximately $23 billion in carbon capture-related investments, with projections of creating around 4,500 jobs.
As with the Microsoft AtmosClear project, the planned $1.35 billion Woodland Biofuels project at the Port of South Louisiana will use sustainable biomass sources, such as sugarcane bagasse and forest trimmings, to combine renewable natural gas production with carbon capture. Woodland Biofuels, which would become the world's largest carbon-negative renewable natural gas (RNG) plant unless the Microsoft project overtakes it, will be followed by an ultra-green hydrogen facility. Woodland Biofuels aims for a net-negative carbon footprint once Phase 2 construction begins.
“Louisiana’s geology allows us to store CO2 permanently, enhancing the carbon-negative quality of our fuel,” said Greg Nutall, President and CEO of Woodland Bioguels. “With carbon capture, we’re not only generating energy but actively cleaning up the atmosphere.”
Air Products is already constructing a $4.5 billion complex in Ascension Parish which will produce “blue” hydrogen and capture over 5 million metric tons of CO₂ annually for permanent underground storage. Blue hydrogen is not as environmentally clean as green hydrogen because it is produced from natural gas, which can leak methane, and its production involves significant energy consumption, often sourced from fossil fuels.
