The United States is one of the richest countries in the world and spends the most public money on so-called “climate solutions” that have been proven to “consistently fail, overspend or underdeliver,” according to an analysis released Thursday by research and advocacy group Oil Change International.
The group’s report entitled Financing errorsfocuses on international spending on carbon capture and subsidies for hydrogen from fossil fuels. This spending continues despite numerous data showing that after 50 years of research and development, the technological solutions “have not reduced carbon emissions”.
The report details that 95 percent of all spending on carbon capture is being spent in five countries, with the United States investing the most taxpayer money in the technology, with $12 billion in subsidies over the past 40 years.
Norway is in second place with $6 billion, while Canada has invested $3.8 billion, the European Union $3.6 billion and the Netherlands $2.6 billion in the technology that compresses and uses carbon dioxide emissions or stores them underground.
“It is nothing short of a farce that funds intended to combat climate change are instead supporting the very industries that are driving it.”
Harjeet Singh, Global Engagement Director of the Fossil Fuel Non-Proliferation Treaty Initiative, said:The Guardian that the subsidies were a “colossal waste of money”.
“It is nothing short of a farce that funds intended to combat climate change are instead supporting the very industries that are driving it,” Singh said.
While proponents claim that carbon capture and storage reduces Earth-warming CO2 emissions, OCI points out that the method was originally developed in the 1970s “to increase oil production, and this continues to be its primary use,” with the technology “barely” reducing emissions.
Among the most spectacular failures of carbon capture in the United States are the Petra Nova project in Houston, Texas, which cost nearly $200 million in taxpayer money and whose captured emissions were later used to produce crude oil, and the FutureGen project, “which cost $200 million and never came to fruition.”
“Investments in carbon capture are delaying the transition to renewable energy,” the OCI report says. “Instead of wasting time and money on technologies that don’t work, governments must commit to a just and urgent phase-out of fossil fuels before it is too late.”
Despite the lack of data supporting the use of carbon capture, the group said, countries like the United States are preparing to “waste hundreds of billions of taxpayer dollars on these ineffective technologies, which further profits the fossil fuel industry.”
OCI highlighted that while supposedly tackling the climate crisis, the US and Canada have spent a combined $4 billion in public money to explicitly “pay oil companies to produce more oil,” with the subsidies going toward carbon capture and “enhanced oil recovery.”
The report also found that in addition to the $12 billion in taxpayer money it has spent on carbon capture and fossil hydrogen – a leak-prone gas produced in energy-intensive processes that in turn create emissions – the U.S. government has spent an estimated $1.3 billion on the 45Q tax credit, which allows companies to write off taxes for every ton of carbon dioxide they store underground.
The Inflation Reduction Act (IRA) increased the amount of subsidies provided to companies under the 45Q tax credit from $35 to $60 per ton, meaning the subsidies could grow to over $100 billion over the next decade.
OCI’s Policy Tracker shows that total public spending on carbon capture and hydrogen could increase by $115 billion to $240 billion over the coming decades.
“We need real climate action, not bailouts for fossil fuels!” said an OCI post on social media.
The group’s report also highlights that fossil fuel giants like ExxonMobil have gone from being skeptical of carbon capture to outspoken advocates of the technology. The company boasted to investors that its Low Carbon Business Unit could earn “hundreds of billions of dollars” from carbon capture and hydrogen and become “bigger than ExxonMobil’s base business.”
Exxon only launched its carbon capture efforts in 2018, after the company had already invested several years and hundreds of millions of dollars in another, ultimately failed, “climate solution”: using algae to produce biofuels.
Since then, Exxon has been pushing for “direct government funding for carbon capture, particularly from the U.S. Department of Energy” and successfully lobbying for $12 billion in the bipartisan 2021 infrastructure bill for “carbon management research, development and demonstration.”
Exxon also pushed for an increase in the 45Q tax exemption in the IRA, according to the OCI, and “played a ‘central role’ in drafting a Department of Energy-sponsored report on carbon capture in 2019 that found that Congress needed to create an incentive of about $90 to $110 per ton to support the deployment of carbon capture.”
The Guardian On Thursday, it was reported that Exxon is still “chasing billions in U.S. subsidies for a ‘climate solution’ that helps produce more oil.” The oil giant hosted an event at the Democratic National Convention earlier this month where Vijay Swarup, the company’s senior director of climate strategy and technology, praised the IRA for helping Exxon capture carbon dioxide. He said: “We need new technologies and we need policies that support those technologies. We need governments working with the private sector.”
Exxon’s enthusiasm for carbon capture is an example of how “the fossil fuel industry is delaying climate action, distracting from real solutions that would end the fossil fuel era, and doing everything in its power to squeeze every last drop of profit out of a dying industry at all of our expense.”
