Is Carbon Capture and Storage a Climate Solution?

Fossil fuel companies’ favorite climate solution has scored tens of billions of dollars in support from the Biden administration and Congress, but many environmentalists and scientists say it is a dangerous boondoggle.

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In Brighton, Colorado, a lab at Global Thermostats' commercial-scale direct air carbon capture facility. The facility pulls in air and collects carbon dioxide to store or to use for industrial purposes to help address climate change. Credit: RJ Sangosti/MediaNews Group/The Denver Post via Getty Images.
In Brighton, Colorado, a lab at Global Thermostats' commercial-scale direct air carbon capture facility. The facility pulls in air and collects carbon dioxide to store or to use for industrial purposes to help address climate change. Credit: RJ Sangosti/MediaNews Group/The Denver Post via Getty Images.

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Carbon capture and storage refers to a suite of technologies that remove carbon dioxide from smokestack emissions and then compress the climate-warming gas for injection underground. The idea is not new, but has gotten lots of attention and tens of billions of dollars in funding in recent years as governments look to accelerate efforts to cut climate pollution.

The technologies could, theoretically, help reduce emissions from coal- and gas-fired power plants and industrial operations like cement and steel manufacturing, and it could also be used to make low-carbon hydrogen fuel from natural gas. The problem is that building and running carbon capture operations is expensive, involves complex engineering challenges and presents environmental risks. One CO2 pipeline ruptured in Mississippi in 2020, sending dozens who were exposed to the gas to the hospital. Carbon dioxide that is injected underground can also leak into groundwater or the atmosphere if storage sites are not properly screened or maintained.

Despite decades of research and billions in public and private investment, there were only a few dozen CCS plants operating worldwide as of March 2023, with the ability to remove only about 46 million metric tons of carbon dioxide per year, according to the International Energy Agency. That’s equal to about 0.1 percent of global CO2 emissions. Most of the existing capacity is attached to gas processing plants, where oil companies separate naturally-occuring carbon dioxide from methane, also known as natural gas. Capturing CO2 from these gas processing plants is generally far cheaper than doing so at power plants or industrial sites.

Some of the biggest supporters of CCS have been fossil fuel producers. Oil companies lobbied hard to secure billions in federal loans, grants and tax incentives that were included in the 2021 infrastructure bill and Inflation Reduction Act of 2022. Many environmental groups have said this money would be better spent on efforts to phase out fossil fuels and have criticized CCS as  little more than “greenwashing” for oil companies looking to burnish their image.

But some academics and policy experts argue that CCS could play a small but important role removing emissions not from fossil fuel combustion but from other sectors of the economy, like cement and steel manufacturing, which produce significant pollution but do not currently have viable alternatives.

New rules proposed by the Environmental Protection Agency would require the nation’s largest coal and gas power plants to install carbon capture equipment if they plan to continue operating beyond 2040. At the time the rules were proposed, there were no commercial-scale power plants with CCS running in the United States. So far, utilities looking to reduce their climate pollution have generally said carbon capture remains too expensive to use at their existing coal plants and have opted instead to replace them with wind and solar energy generation.

Why it Matters

  • After lobbying by fossil fuel companies, Congress and the Biden administration have allocated billions in grants and loans and potentially tens of billions more in tax incentives to carbon capture, despite concerns the technology will not meaningfully reduce emissions and will present its own environmental risks.
  • Some academics and policy experts say carbon capture and storage could play a small but important role reducing emissions from “hard-to-abate” sectors like cement, steel and chemicals production.
  • Energy companies want to apply carbon capture widely to power plants, refineries and more. Some activists worry that even if the technology reduces climate pollution, it will fail to reduce toxic emissions from fossil fuel infrastructure while allowing refineries, pipelines and gas wells to continue polluting for decades.

By the Numbers

  • The 2021 bipartisan infrastructure bill devoted more than $12 billion to carbon capture and removal and another $8 billion to “clean hydrogen,” a portion of which will flow to CCS projects. The Inflation Reduction Act also increased the value of an existing tax credit by 70 percent, so that companies can claim up to $85 for every ton of CO2 captured from a smokestack, and up to $180 for every ton that is removed directly from the atmosphere.
  • ExxonMobil has proposed building a carbon capture hub that would tie together the Houston area’s refineries, power plants and petrochemical manufacturers. If it reached the scale Exxon proposed—initially capturing 50 million metric tons by 2030—the companies involved could be eligible to receive more than $4 billion annually in federal tax incentives for 12 years.

Dive Deeper

ExxonMobil’s $100 billion Carbon Capture Proposal

The biggest and boldest carbon capture proposal has come from ExxonMobil, which announced in 2021 that it wanted to join with the Houston area’s biggest polluters to capture carbon dioxide from the area’s refineries, power plants and petrochemical complexes. The $100 billion proposal could work only with substantial government support, the company said, though Exxon has begun to assemble much of that in the form of tax incentives, grants and new regulations.

Some of the companies involved, including Exxon, Chevron and Air Liquide are part of a grant application submitted to the Energy Department in April 2023 for funding under an $8 billion clean hydrogen hub program.

The Houston area has some of the nation’s most polluted air, and some environmental advocates in the region worry that even if carbon capture works, it will fail to reduce toxic emissions from refineries and petrochemical plants.

Carbon Removal and Direct Air Capture

Direct Air Capture is a related group of technologies that pull carbon dioxide directly from the air, rather than from smokestacks. These “DAC” plants could theoretically be built anywhere that underground storage is available.

Supporters say this “carbon removal” could play an important role in addressing climate change, by offsetting emissions from agriculture, air travel and other hard-to-tackle sectors and even, one day, by helping reverse some warming by lowering levels of CO2 in the atmosphere. But critics point to the high costs and high energy demands of the process, saying the projects either won’t reach a meaningful scale or would demand too much electricity if they did.

There were 18 DAC plants operating globally as of April 2022, according to the International Energy Agency, though most sell the CO2 for use rather than permanent storage. The largest can remove only 4,000 metric tons of carbon dioxide per year, equal to the annual pollution from about 900 cars. But Congress has allocated billions to support research and the construction of direct air capture hubs around the country.

One company plans to build a plant in a fossil fuel-dependent part of Wyoming. Some residents there hope the project can provide jobs, while others fear it will require converting large areas of open range to fenced-off developments. In May, the Energy Department announced a $41 million grant to help study carbon storage potential and obtain permitting in the area, and in August, it gave another $12.5 million to directly support the project.
Another major project is under construction in West Texas. There, Occidental Petroleum plans to pull CO2 from the sky and use at least some of the gas to help squeeze oil from depleted underground reservoirs. Occidental has secured local school tax breaks and is seeking financing through California’s low-carbon fuels standard, a program meant to reduce climate pollution from the state’s vehicles. These moves had drawn criticism from some environmental groups who say Occidental is effectively using public funds to help subsidize oil production. In August, the Energy Department awarded Occidental up to $600 million to build a separate DAC project in South Texas, which would not use any of the captured carbon dioxide for oil production.

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