A technology startup backed by the Biden administration has scrapped its plans to build a massive facility in Wyoming for filtering climate pollution from the atmosphere, leaving the fate of one of the world’s largest proposed carbon removal developments in limbo.

The company, CarbonCapture, said it was unable to secure enough carbon emissions-free energy to operate the direct air capture megaproject known as Project Bison, which was intended to remove 5 million tons of CO2 annually by 2030. Using power from fossil-fuel-fired facilities would reduce the net amount of carbon the DAC plant could pull from the sky.

“We’ve seen growing competition for clean power amongst industries that are emerging much faster than anybody would have ever predicted,” CEO Adrian Corless said in a statement posted Friday on the company’s website. “This has acutely affected our efforts in Wyoming, and as a result, we’ve decided to pause our development of Project Bison.”

The California-based startup pointed to competition from other energy-hungry customers such as data center operators and cryptocurrency miners, which have been embraced in Wyoming. Corless said his company intends to build its first commercial-scale project outside of the Cowboy State, which gets more than 70 percent of its electricity from coal-fired power plants.

The change of plans comes as Amazon and other big technology firms are racing to build new data centers for generative artificial intelligence programs. The AI-driven building boom has put Silicon Valley’s lofty climate goals further out of reach and appears to threaten the viability of some of the direct air capture facilities that the tech industry is banking on to help zero out its emissions. Last year, Amazon purchased an equity stake in CarbonCapture, a deal that included an option to buy also 100,000 tons of removals from the startup.

Direct air capture plants use electricity, heat, piping and carbon-absorbing materials to filter CO2 from the atmosphere and store it underground or in long-lasting products such as cement. Climate scientists have concluded that DAC and other carbon removal technologies — along with steep emission cuts — will be necessary to avoid dangerously overheating the planet.

The largest direct air capture plant in operation is Climeworks’ Mammoth facility in Iceland, which is capable of removing up to 36,000 tons of CO2 annually. In 2025, Occidental Petroleum plans to bring online a 500,000 ton per year plant in Texas known as Stratos. The Biden administration’s $3.5 billion DAC hub program aims to fund the development of four installations that can remove at least 1 million tons annually.

CarbonCapture, which first announced Project Bison in 2022, aimed to create a DAC development larger than all of those efforts combined.

‘Setback for the state’

CarbonCapture’s decision to abandon its Wyoming facility surprised industry analysts because Project Bison seemed to be charging ahead with strong support from the federal and state governments.

The Department of Energy awarded $12.5 million to a CarbonCapture-led coalition in August 2023 to help fund engineering studies for the project. The funding was widely seen as a signal that Project Bison was a leading contender for one of the $500 million direct air capture hub prizes that the agency plans to award in the coming years.

In December, Wyoming regulators granted difficult-to-obtain permits to Frontier Carbon Solutions, a CO2 storage partner working with the startup. The lack of long-term carbon storage infrastructure has been a stumbling block for other direct air capture projects, which need a place to dispose of the climate pollution after they suck it from the sky.

“What’s very interesting is that we’re talking about Wyoming,” said Erin Burns, the executive director of the environmental group Carbon180. “That’s the thing that stands out.”

Wyoming’s political, business and academic leaders have “really invested a lot in carbon management infrastructure for a long time,” she said.

“It definitely is a setback for the state,” added Katie Lebling, a carbon removal expert at the World Resources Institute, an environmental think tank.

A spokesperson for Republican Gov. Mark Gordon, who aims to transform the state from a major CO2 emitter to a leader in carbon removal, said in an email that “the Governor is disappointed that the proponents of Project Bison have determined to transfer the project out of Wyoming.”

Michael Pearlman, the governor’s spokesperson, indicated that the state intends to continue pursuing federal funding for a direct air capture hub — without CarbonCapture.

“While Project Bison was a potential supplier of CO2 for the hub, plans are for development of the hub to continue,” he wrote in an email. “Carbon capture remains a vital part of the Governor’s policy to help maintain fossil fueled power plants.”

Robby Rockey, the co-CEO of Frontier Carbon Solutions, said in a statement that CarbonCapture’s surprise exit “highlights a critical need for better power options in the Mountain West.” He added, “clean, reliable power and safe sequestration go hand-in-hand as part of a strong carbon management strategy.”

Wyoming Sen. John Barrasso, the top Republican on the Energy and Natural Resources Committee who has co-authored bipartisan legislation to boost carbon removal, didn’t respond to a request for comment.

Questions about funding, customers

It’s unclear what will happen to the $12.5 million that DOE committed — but hadn’t delivered — to the project.

“While site selection is an important consideration in DOE’s merit review process, the decision ultimately rests with the applicant,” wrote an agency spokesperson, who declined to be identified by name. “DOE has not terminated negotiations with any selected project under the Regional Direct Air Capture Hubs program.”

CarbonCapture has already sold more than 89,000 tons of carbon removals to Microsoft, Boston Consulting Group and other major corporations, according to CDR.fyi, an industry data clearinghouse.

The startup said it would deliver on those commitments in part via a pilot plant it’s planning to open in 2025 that will be capable of removing 2,000 tons of CO2 annually.