Take on a podcast episode from The CDR Policy Scoop, originally published Wed, 15 Ju. Listen: https://shows.acast.com/the-cdr-policy-scoop/episodes/inside-the-fight-to-save-600-million-for-dac-with-vikrum-aiy

TL;DR

  • Heirloom’s VP of policy explains how the ~$600M Louisiana DAC Hub award survived Trump-era review — while other hub tiers got cut. Useful post-mortem, not spin.
  • Winning argument wasn’t climate: LNG export carbon intensity, workforce transferability, and hyperscaler siting. A repeatable playbook, candidly described.
  • 45Q’s $180/t is intact post-BBB, but reporting is in limbo: EPA’s GHGRP move broke the verification chain, Treasury’s safe harbor lapsed end-2025, replacement framework not yet issued.
  • California’s cap-and-trade extension put CDR integration into statute and lets emitters comply via direct capital expenditure (CapEx) investment into removal facilities — Aiyer sizes the market “in the billions.”
  • The $85M/yr Cap-and-Invest pot is small; the statutory integration is the real story. First detailed practitioner account I’ve seen of the mechanism.

Sebastian Manhart hosts Vikrum Aiyer, Heirloom’s head of global energy and climate policy, on The CDR Policy Scoop for a 30-minute tour of US direct air capture (DAC) policy: the DAC Hubs rescue, the 45Q reporting gap, and California’s Cap-and-Invest program.

The most transferable content is the coalition anatomy. The Heirloom/Climeworks/Battelle award — up to $600M from the $3.5B Bipartisan Infrastructure Law pot — sat under review for roughly 18 months, and several other hub-tier projects were cancelled. What saved this one, per Aiyer: Louisiana economic development groups, workforce organizations arguing pipefitter/electrician skills transfer directly from energy majors, and the governor’s office framing DAC as export competitiveness — EU carbon border adjustments mean Gulf LNG needs a carbon-intensity answer. “It’s not really about being ideologically promiscuous with the person in power,” Aiyer says, but persuading on the grounds decision-makers already care about. He’s unusually direct that this required leaning on enhanced oil recovery adjacency and fuel synthesis partners (Mitsubishi, Japan Airlines, United) — arguments some in the field find uncomfortable, which is exactly why hearing them articulated is worth your time.

The 45Q segment is the practical alert. The credit pays up to $180/t for durable sequestration and was strengthened by the One Big Beautiful Bill Act — but the verification premise rested on EPA greenhouse gas reporting (subpart RR), which the EPA’s repeal disrupted. Treasury’s safe harbor ran through end-2025; the replacement reporting framework “is not ensconced today,” with the Carbon Capture Coalition and Occidental/Carbon Engineering pushing Treasury on a new structure. If your project economics assume 45Q, this is an open operational risk, and Aiyer couldn’t fully clarify the current 2026 status on-mic.

On California: beyond the $85M/yr Cap-and-Invest decarbonization pot, the cap-and-trade extension (AB 1207 / SB 840 context) wrote CDR integration into statute, with a mechanism letting covered emitters meet obligations by investing — CapEx, not credit purchases — ton-for-dollar into carbon management facilities. That’s a structurally different demand signal than offtake, and it echoes the compliance-market integration debate around the EU Emissions Trading System, where a summer 2026 CDR decision is anticipated. Aiyer flags the legitimate environmental justice counterargument (investment options divert revenue from allowance auctions) rather than waving it away. Worth pairing with the Stockholm Exergi final investment decision, which both men cite as the template for stacking incentives to reach FID — and with Frontier’s buyer-side pull, which Aiyer notes Anthropic recently joined.

Most useful for US policy leads and anyone modeling 45Q-dependent project economics; skippable if you followed the DAC Hubs saga closely in real time.