A handful of governments have spent nearly US$30 billion in public funds on carbon capture and hydrogen projects, mostly for private fossil fuel companies, over the past 40 years, a new report from Oil Change International finds.
National governments are expected to spend an additional US$115 billion to US$240 billion in the coming decades, the report’s analysis shows. The United States, Norway, Canada and the Netherlands account for the bulk of this public spending, but it’s largely private companies that benefit.
Around 83 per cent of the captured CO2 is used for enhanced oil recovery, in which industrially compressed carbon is injected underground to extract more oil. Currently, 41 commercial carbon capture and storage (CCS) projects are operating worldwide; the majority are managed by fossil fuel companies, such as ExxonMobil and Shell.
“Oil is the most profitable industry in the world, and the idea that we should be propping it up with public money is just plain ridiculous,” Lorne Stockman, the report’s lead author, told Mongabay by phone. “It shows the incredible influence that this industry has over our policy-making and over our politicians, and it needs to stop.”
Intense lobbying efforts have helped keep CCS funding flowing, despite criticism about its effectiveness as a solution to climate change. At least 475 lobbyists supporting CCS were identified at COP28, outnumbering the 316 Indigenous representatives present, a survey found.
Global CCS capacity is estimated at 65 million tons, 0.15 per cent of 2023 emissions. But real figures are significantly less, as existing projects capture as little as 10 per cent of their capacity.
“It is only a solution for the fossil fuel industry, not for people and the planet,” the report warns.
Existing projects fail to deliver on their promised output when extracting oil, and more than 80 per cent of projects have failed to launch at all, despite receiving substantial public investment.
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Oil is the most profitable industry in the world, and the idea that we should be propping it up with public money is just plain ridiculous.
Lorne Stockman, research director, Oil Change International
The now-defunct coal-fueled FutureGen project received US$1 billion in pledges by the United States government only to be cancelled less than five years later.
Meanwhile, Norway spent at least $3 billion Norwegian kroner (US$280 million) on a full-scale carbon capture project at the Mongstad oil refinery that was ultimately scrapped. The waste of public money was criticised by Parliament and government auditors.
Intended to reduce emissions, these technologies could have the opposite effect and delay a shift away from fossil fuels, Oil Change International’s analysis suggests.
Mark Jacobson, a Stanford University civil and environmental engineering professor not involved with the report, said that public subsidies are better spent on moving toward wind and solar energy.
“We should focus on what works and not waste time on things that don’t,” he told Mongabay by phone.
This story was published with permission from Mongabay.com.
