Can carbon dioxide be captured and stored before it is released and heats up the atmosphere? Indeed, that is the question that a growing number of countries and companies are asking as they look to fund carbon capture and storage (CCS) technology worldwide.1
Many companies are investing in CCS
Carbon capture technology is “destined to become one of America’s big growth industries”, a senior writer at Forbes predicted in February 2021.2 Currently, a growing number of companies are investing in carbon capture technology. This is spurred by tax breaks or other government incentives.
In fact, The Financial Times recently reviewed several companies looking at breakthrough technologies to capture carbon dioxide emissions.3 The Bank of America estimates that total investment into CCS could hit USD $1 trillion by 2050.4
There are many companies to watch in the CCS industry. However, most entities currently investing in CCS technology are large fossil fuel companies.5 In April 2021, the oil giant Exxon proposed a USD $100 billion public-private project to store 50 million metric tonnes of CO2 by 2030. CCS technology could attract around USD $2 trillion of investment by 2040, Exxon estimates.6
The government in the Netherlands gives $2.4 billion in subsidies to fund CCS
In May 2021, the Dutch government planned to award over €2 billion to four companies to build CCS facilities. The project will capture pollution from oil refineries and hydrogen production plants from Shell, Exxon, Air Liquide SA, and Air Products and Chemicals Inc. The aim is to compress and then pump the pollution into a sandstone reservoir three kilometres below the seabed.
The government wants to encourage companies to invest in such technology by subsidising CCS facilities. Ideally, this will drive down the price of capturing CO2 quickly. The project is due to finish by 2024.7
Canada is offering a tax credit for CCS
In April 2021, Canada outlined a plan to offer tax credits for carbon capture and storage (CCS) projects. What is more, the Canadian government also pledged to invest more in the technology. It was the first budget to mention CCS specifically. In fact, it said that the technology would be crucial for Canada to reduce its carbon dioxide emissions and meet net-zero CO2 targets.
Canada has long been criticised for investing in oil sands. In fact, its oil industry has been named “the world’s most destructive oil operation” by National Geographic magazine.8 The Canadian government said it would introduce an investment tax credit for carbon capture projects after a 90-day consultation period. It is likely to be based on a similar, successful scheme in the US (45Q tax credit) that also attracted billions of dollars of investment in CCS projects.9
CCS was once seen as far too expensive. But increasingly, countries are realising that they need to invest in carbon capture technology as part of a push to reduce carbon dioxide emissions.
- Ambrose, J. (2020). What is carbon capture, usage and storage – and can it trap emissions? [online] the Guardian. Available at: https://www.theguardian.com/environment/2020/sep/24/what-is-carbon-capture-usage-and-storage-and-can-it-trap-emissions.
- Blackmon, D. (2021). Elon And Exxon Agree: Carbon Capture Is Set To Explode In 2021. [online] Forbes. Available at: https://www.forbes.com/sites/davidblackmon/2021/02/04/elon-musk-and-exxon-agree-ccsu-is-set-to-explode-in-2021/?sh=4106b75762cf [Accessed 17 May 2021].
- McGee, P. (2021). Clean tech offers breath of fresh air for carbon-reliant Canada. [online] www.ft.com. Available at: https://www.ft.com/content/5e0574e9-e819-485e-a2e5-412f69411971 [Accessed 17 May 2021].
- Meredith, S. (2021). Wall Street analysts pick stocks to cash in on a potential $1 trillion energy opportunity. [online] CNBC. Available at: https://www.cnbc.com/2021/04/26/wall-street-pick-stocks-for-a-potential-1-trillion-energy-opportunity.html.
- Dru, J. (2020). Carbon capture is the fossil fuel giants’ plan to keep extracting. [online] Geoengineering Monitor. Available at: https://www.geoengineeringmonitor.org/2020/03/carbon-capture-is-the-fossil-fuel-giants-plan-to-keep-extracting/.
- Hiller, J. (2021). Exxon floats $100 bln carbon storage project requiring public, private financing. [online] Reuters. Available at: https://www.reuters.com/business/sustainable-business/exxon-proposes-massive-carbon-capture-storage-project-houston-2021-04-19/ [Accessed 17 May 2021].
- Mathis, W and Rathi, A. (2021). Netherlands Pledges $2.6 Billion Subsidy to Bury Carbon Under the Sea. [online] gCaptain. Available at: https://gcaptain.com/netherlands-pledges-2-6-billion-subsidy-to-bury-carbon-under-the-sea [Accessed 17 May 2021].
- NatGeoUK (2019). This is the world’s most destructive oil operation—and it’s growing. [online] National Geographic. Available at: https://www.nationalgeographic.co.uk/environment/2019/04/worlds-most-destructive-oil-operation-and-its-growing.
- news.bloomberglaw.com. (n.d.). Incentives Spur Investors to Pick Up Pace on Low-Carbon Projects. [online] Available at: https://news.bloomberglaw.com/environment-and-energy/incentives-spur-investors-to-pick-up-pace-on-low-carbon-projects [Accessed 20 May 2021].