Page 27 - bne magazine September 2023

bne September 2023 Companies & Markets I 27
Carbon capture has been been a fashionable solution to reducing CO2 levels, but the truth is that it doesn't work and its main purpose is to make people feel comfortable with continuing to use fossil fuels and plastics. / bne IntelliNews
bne:Green
Carbon capture is only a way to make people feel good about continuing emissions
bne IntelliNews
In recent weeks, the United States has witnessed a surge in carbon capture investment, with major players in the energy sector making significant moves. ExxonMobil Corp. made headlines by acquiring the nation's largest network of carbon dioxide pipelines for $4.9bn. The Department of Energy (DoE) also joined the fray, allocating $1.2bn to fund projects aimed at extracting CO2 from the atmosphere. Additionally, Occidental Petroleum Corp. struck a deal worth $1.1bn to purchase a Canadian direct air capture (DAC) startup, Bloomberg reported on August 17.
However, as a technology it remains ineffective. As the US makes strides in carbon capture and sequestration (CCS), questions linger about its efficacy in combating climate change. While the technology holds the promise of retaining the benefits of fossil fuels without the harmful emissions, critics contend that it merely serves to assuage guilt over fossil fuel usage while offering limited environmental benefits.
Historically, the fossil fuel industry has faced similar scrutiny. The industry's advocacy for recycling, for instance,
aimed to extend the life of plastic, a material derived from petrochemicals. Yet despite substantial taxpayer funding and decades of awareness campaigns, the US recycles less than 10% of plastic waste.
Over the past 15 years, CCS has encountered challenges in translating potential into reality, despite substantial financial support. Many projects struggled to overcome the economic reality that releasing CO2 into the atmosphere is cheaper than the costs associated with cleanup efforts. The Inflation Reduction Act (IRA) introduced by President Joe Biden, which offers generous tax incentives for CCS, aims to bridge this economic gap while aligning with the growing carbon offset market.
Nonetheless, the recent funding of two projects by the DoE, in collaboration with investors including Occidental and Climeworks AG, highlights the uphill battle ahead. These projects, despite their significance, are projected to remove only 2mn tonnes per year (tpy) of CO2, a fraction of the total energy-related emissions in the US. The primary objective is
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