In January, Mark Carney told the crowd at the World Economic Forum’s annual meeting that the middle powers, like Canada, have the capacity to build a new world order and that allies will need to diversify to hedge against uncertainty. For Canada, the government is partly betting on a lower-carbon economy to meet this middle-power moment. The federal government’s climate competitiveness strategy aims to leverage clean technology and the nation’s abundant natural resources to boost Canada’s economy and position itself as a climate leader.

Though there are federal actions that have undercut this ambition, such as continued oil and gas subsidies, and evidence that curbing emissions in Canada has stalled, the economic case for climate action in Canada is strong. Some 66% of investments in Canadian oil and gas infrastructure are at risk of becoming stranded, according to a 2025 report by the International Institute for Sustainable Development. Canadian pension giant La Caisse saw investments in renewable energy tripled between 2017 and 2025, from $9 billion to $27.4 billion. Jobs within the environmental and clean technologies sector have grown faster compared to the broader economy for three years straight, according to a 2026 Statistics Canada study.

It’s against this backdrop that Toronto Climate Week (TOCW) 2026 will bring together innovators, business leaders, policymakers, researchers, artists and community members from all over the world. The second annual week-long event, from June 1 to 7, aims to showcase local and Canadian innovations while connecting to global opportunities, all while tapping into the discourse around the future of the global sustainable economy.

“I think Canada has a major opportunity right now to shape the global conversation around the clean-energy transition, and how the benefits of that transition to green energy can be an economic benefit for Canada,” says Kate Johnson, regional director for North America at C40 Cities, a global network of mayors from major cities working on climate action.

Cities lead on climate

Johnson, who is attending the Toronto event, has seen several climate action weeks pop up around the world. In some ways, that’s no surprise: “[Cities are] really the first responders,” she says, when it comes to climate change impacts, which intersect with rising energy bills and housing costs. Cities want to respond holistically to these overlapping crises, but it’s challenging, she says. Cities in the C40 network share resources and clout, and they’re making the case that it’s smart to use climate-smart solutions to address broader concerns.

Toronto Climate Week is “a really great opportunity just to get a pulse of what’s happening, not just in Toronto, but in Canada more broadly,” Johnson says. The event is expected to attract around 10,000 attendees to more than 200 scheduled events across the city. On the agenda are things like carbon solutions, the circular economy, cleantech and environmental justice.

Carbon focus

One of the flagship events, Carbon Solutions: Canada’s Competitive Advantage, will look at several carbon-removal and -management solutions in Canada and global markets. Carbon removal is forecast to be a US$1.2-trillion industry by 2050, according to a 2023 McKinsey report. With 20% of the world’s fresh water, 347 million hectares of boreal forest, 62.2 million hectares of farmland, more than 240,000 kilometres of coastline and an abundance of nature, Canada has ample opportunities to leverage its resources to help support climate action – and a lot to protect, too. Several companies have already started to look to Canada’s landscapes to sequester carbon.

Brady Paron, senior vice president of carbon market partnerships at Mast, a reforestation company working on restoring landscapes after wildfires, will be on a panel at the carbon-solutions flagship event. Mast takes trees that were killed in wildfires and buries them deep underground to prevent the wood from further decomposing and releasing more carbon into the atmosphere. To fund wildfire cleanup and landscape restoration expenses, Mast sells carbon credits to companies.

So far, there has been only a pilot project in Montana, but Canada is on Mast’s radar. “We see there’s a huge opportunity for biomass burial projects in Canada, given that we’ve got tons of forests in Canada,” Paron says, “and we’re unfortunately also seeing increasing wildfires here as well.” Paron is Canadian and based in Toronto but works for a U.S.-based company. He says this hybridity affords him a useful lens for TOCW: it’s not just about highlighting the incredible innovation in Canada, but also showcasing solutions to the entire world. “Canada can be a superpower for this moving forward.”

Sequestration strategy

Undo, a U.K.-registered company, has also focused on carbon sequestration projects in Canada. Working with farmers in Ontario, Undo offers enhanced rock weathering, a method that crushes abundant silicate rocks into a powder, through carbon credits sold to companies. The crushed rock both captures carbon from the atmosphere and can improve soil health, creating a win-win for the climate and farmers.

Peggy Sue Deaven, general manager for Canada at Undo, thinks that climate-solution companies like Undo need to showcase that they can make just as much business sense as the conventional big emitters. “We are a robust, competitive, for-profit, eat-your-heart-out [business], and we do good things.” Deaven, who will also be on a panel during the flagship TOCW carbon-solutions event, adds that climate solutions is an area where Canada can already own its leadership status in the world and that there are solutions that make economic sense.

With an existential threat like climate change, it’s important to connect with others, Deaven argues. “The soaring potential for folk to come together audaciously and to think what’s next, how are we pulse-checking with one another – that kind of community coming together is exceptional,” she says. “Toronto’s such a hub for innovation, so it does bring out the best in folk there.”

Corporate Knights is a media sponsor of Toronto Climate Week. This article was produced independently by the Corporate Knights editorial team, and Toronto Climate Week did not review or approve the content prior to publication.

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For environmentalists, it means acknowledging that end-of-pipe solutions like carbon dioxide capture and storage (CCS) do have a role after all. And for the fossil fuel industry, it means accepting that they need to decarbonize not just their own processes, but also the products they sell – and without expecting the Canadian taxpayer to foot the bill. In the short term, this might make those products less profitable – although it might also give them a more secure, if less exciting, long-term future.

Dismissing the notion of “decarbonized oil” as a myth is equivalent to saying that stopping climate change is a myth: but it has to mean genuinely decarbonized oil. Safe and permanent disposal of all – yes, all – the carbon dioxide they generate is the only way to stop fossil fuels from causing further global warming before the world stops using fossil fuels. And if anyone believes the world will stop using fossil fuels altogether in time to prevent dangerous climate change, we suggest that they look at recent events in Venezuela and think again.

A matter of timing

Make no mistake, we need to reduce our dependence on fossil fuels as far and as fast as possible. But every year that goes by makes it clearer that won’t be far or fast enough. Carbon dioxide accumulates in the climate system like lead in the bloodstream. We can slow warming by emitting less, but it won’t stop until we stop emissions entirely, or balance any residual emissions with active carbon dioxide removal.

It’s conceivable, albeit unlikely, that renewable or nuclear energy are about to become so cheap that everyone, everywhere, will lose all interest in using fossil fuels, even in “hard to abate” sectors like aviation, within the next few decades. It is also conceivable, albeit even more unlikely, that everyone, everywhere, will agree on carbon prices so high that they amount to a de facto worldwide ban on continued fossil fuel extraction and use. But it would be folly to bet the future on either of these things happening.

Everyone talking about “decarbonized oil” needs to level with Canadians about what it means. Capturing the carbon dioxide generated in the production and refining of fossil fuels is the obvious place to start – but it is only a start.

In the absence of that worldwide ban, or fossil-free energy that is cheaper than natural gas in Qatar, the only other way to stop fossil fuels from causing further global warming is to capture every tonne of carbon dioxide they generate and pump it back underground. This means capturing as much as possible at source, with CCS, and taking the rest back out of the atmosphere, through active carbon dioxide removal (CDR). The industry is already doing both: the challenges are not technical, but economic. CDR is still very expensive, and lots of CCS projects run over budget – often because operators have no incentive to control costs as someone else is footing the bill.

There are other, potentially equally permanent, disposal options, like reacting carbon dioxide with rocks or storing it in the oceans, but geological disposal is the only one proven on a multi-million-tonnes-per-year scale. And even that needs scaling up by at least a factor of 100 to have any hope of balancing all remaining fossil fuel use even in the most optimistic scenarios for renewable-energy deployment.

A pragmatic solution

Environmentalists should be actively promoting CCS, not trying to block it.

This balance, between ongoing production of carbon dioxide from geological sources with disposal of carbon dioxide into geological sinks, is what we called “geological net-zero” in a paper published last year involving all the authors of the six papers that established, back in 2009, what it would take to stop carbon dioxide from causing global warming.

Mark Carney trades climate allies for controversial oil-patch solutions

The carbon dioxide we are emitting today was locked away in fossil fuel reserves formed from ancient forests, marine organisms and plant material that accumulated over tens to hundreds of millions of years. In just a few decades, we are reversing that geological process, returning carbon to the atmosphere at a pace without precedent in the recent history of the Earth system. Atmospheric greenhouse gas concentrations are heading toward levels last seen in the Jurassic period. And while it is sometimes said that “the dinosaurs lived with that much carbon dioxide,” it is worth remembering that they are no longer around.

The geological record reminds us that high-carbon worlds are not hypothetical, but neither are they environments in which human civilization has ever existed. The question is not whether the planet endures – it will – but whether the climatic conditions that allowed our societies, economies and food systems to develop can be maintained as we unleash, in decades, what nature took millions of years to put safely away.

Every hundred billion tonnes of carbon dioxide we release from the “geosphere,” or solid Earth, ratchets up global temperatures by one-twentieth of a degree – and we are currently releasing 400 billion tonnes per decade, so our carbon dioxide emissions alone are causing roughly a degree of warming every 50 years. That’s well-understood climate physics.

Can Mark Carney fight climate change while supporting oil and gas?

We can delay that warming for a decade or two by planting trees or cutting methane emissions, but once carbon is released from the geosphere, it’s out, propping up global temperatures until we, or our long-suffering descendants, can pump it back out of the atmosphere and into the geosphere again. And if there was a chance that we would stop using fossil fuels in time to meet our climate goals back in 2015, that chance is long gone. We are going to generate too much carbon dioxide, so we must work out how to get rid of it, permanently and at scale, through a combination of CCS and CDR. Anyone who still thinks otherwise is in a level of denial akin to those who dismiss global warming as a hoax.

Make polluters pay

All that said, everyone talking about “decarbonized oil” needs to level with Canadians about what it means. Capturing the carbon dioxide generated in the production and refining of fossil fuels is the obvious place to start – but it is only a start. We will also need to dispose of the carbon dioxide generated when fossil fuels are used. If that use is for road transport or aviation, that means recapturing it back out of the atmosphere. Technologies exist to do this, but they need to be scaled up.

Disposing of carbon dioxide responsibly is more expensive than just dumping it into the atmosphere: which is why the Pathways CCS project in Alberta is costing $16 billion dollars. But part of the reason CCS is so expensive is the way it is funded: through taxpayer subsidies. If the government asks an industry how much they need to get rid of carbon dioxide, what company would say they can do it cheaply?

There is another way of funding CCS, which is to package the cost of carbon dioxide disposal in with the cost of fossil fuels themselves. We don’t have to dispose of 100% of that carbon dioxide right away, but we must make a start: in our geological net-zero paper, we suggested 10% in the early 2030s, rising to 100% by or soon after mid-century. A mandate to capture and store 10% of the carbon dioxide generated by its production and use would add just a few dollars to the cost of producing a barrel of oil – less than typical taxes and royalties. If companies are mandated to capture and store carbon dioxide as a licensing condition for continuing to sell fossil fuels, they have much more incentive to do it cost-effectively than if they are simply subsidized to install CCS. And as CCS becomes more widely adopted, its price tag plummets.

The world needs fossil fuels that don’t cause global warming. So, whoever works out how to supply the cheapest and most reliable fossil fuels that don’t cause global warming is going to clean up, literally, on a planetary scale.

Canada’s risky gamble on carbon capture and storage

That supplier could be Canada, blessed with an almost unique combination of three vital ingredients: abundant fossil fuels, even more abundant capacity for geological carbon dioxide disposal, and, crucially, a world-beating reputation for climate and geological sciences and responsible resource governance.

The Canadian label

Mark Carney emphasizes that Canada’s oil should be “low risk, low cost and low carbon.” There will come a time when the only low-risk oil is not just low-carbon, but net-zero carbon. One day, no one will want to risk using fossil fuels at all unless either they or their fuel supplier has taken care of all the carbon dioxide those fuels generate, for fear of being held liable for the impact of dumping it into the atmosphere. We cannot predict when that time will come, but as climate impacts accumulate along with public outrage, it may come sooner than even we would have predicted 20 years ago.

If, in the second half of this century, Europe or China or an environmentally conscious U.S. airline wants to buy a barrel of fully decarbonized oil – that is, oil bundled with a commitment to take back and dispose of all the carbon dioxide generated by its production and use, either directly through a pipeline or back out of the atmosphere – who will they want to buy it from? Not from Russia, surely, absent some truly dramatic changes in Russia’s reputation for waste management. Probably not from Venezuela either. Possibly not even from Texas, if the U.S. administration continues to gut the Environmental Protection Agency’s capacity to monitor leaks from potential carbon dioxide storage sites.

They will want to buy it from a country with a proven track record, respect for property rights and the rule of law; a country that, back in the 2020s, made history by being the first to make geological carbon dioxide disposal a licensing condition of extracting fossil fuels and has been progressively scaling up her carbon dioxide disposal industry ever since; a country whose customers can be 100% confident that decarbonized oil really does what it says on the label. The Canadian label.

Myles R. Allen teaches at the University of Oxford in the Department of Physics. Andrew J. Weaver teaches at the University of Victoria in the School of Earth and Ocean Sciences.

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The plant is designed to use Alberta natural gas to produce hydrogen, a clean-burning fuel that is used in refining and could replace oil and gas in a range of applications, including transportation and electricity. Air Products says the plant will capture some 95% of the carbon dioxide it emits and sequester the greenhouse gases in saline aquifer formations deep underground. In short, it was touted as a model for carbon capture and storage (CCS) technology that proponents say can dramatically reduce carbon emissions in the oil and gas sector, as well as in the cement, chemicals and steel industries.

Now, CCS proponents are about to face their biggest test, as Ottawa and Alberta put their weight behind a multibillion-dollar project in the oil sands. 

Fading promise

In 2022, both governments were on board for Air Products’ Edmonton blue hydrogen plants. “We need to be bold and seize the moment, and that’s exactly why we’re investing in Air Products,” François-Philippe Champagne, then the industry minister, said in a 2022 news release. 

The federal government pitched in $300 million from its strategic innovation fund, alongside Alberta’s $161-million contribution to what was pegged to be a $1.6-billion project. The plant was slated to create 2,500 construction jobs, along with 230 “highly skilled jobs.” Above all, the initiative was billed as “another major step forward on the path to net zero,” the federal government said. 

Fast forward three years, and the sheen has faded, amid delays and cost overruns that have doubled the price tag, to US$3.3 billion.

In an investor call last summer, the company labelled the Edmonton operation an “underperforming asset” not expected to be profitable. The plant was originally due to open last summer; projections now put the ribbon-cutting into late 2027, perhaps 2028. Air Products had pinned its hopes on supplying a growing hydrogen market, which so far has failed to materialize. 

Keeping the faith

Despite that setback, CCS technology still plays an important role in Canada’s net-zero ambitions and is a key plank in the government’s climate competitiveness strategy unveiled in the November budget. Prime Minister Mark Carney and Energy Minister Tim Hodgson are counting on CCS to deliver emission reductions even as they support expansion on oil and gas infrastructure that will increase exports and production. 

On November 27, the prime minister announced an agreement in principle with Alberta Premier Danielle Smith, in which Ottawa will support a bitumen pipeline to the West Coast, in exchange for provincial agreement on a higher carbon price and industry investment in CCS.

Carney has focused on CCS as a key to reducing emissions in the oil and gas sector. The Pathways project will be “the largest carbon capture utilization and storage project in the world,” he said in a speech to the Calgary Chamber of Commerce. “It will make Alberta oil amongst the lowest carbon intensity in the world, and it has the potential to create an entirely new industry in Canada.”

At the same time, proponents are touting CCS as a key means of cutting emissions in industrial sectors like cement and steel.

Despite the ongoing enthusiasm in Ottawa, the Air Products failure serves as a warning to the Liberal government and other would-be investors. Scaling up CCS will require huge subsidies. Just how much investment risk corporations will take on it remains up in the air. And in Canada, the tension between climate policy and a powerful petroleum sector is on full display, adding another layer of uncertainty.

Environmental groups argue that CCS is being used as a panacea to justify continued production and use of oil and gas, which will make it harder and more costly to deal with climate change in the coming decades. The majority of emissions from a barrel of oil, after all, come from its combustion in cars, planes, ships and other end uses.

“The narrative around so-called decarbonizing oil is nothing but a myth to justify expansion of oil production,” says Aly Hyder Ali, oil and gas manager at the Canadian advocacy group Environmental Defence. 

An expensive proposition

Canada is not alone in pursuing CCS. It remains an important component in decarbonization strategies produced by groups like the International Energy Agency and the United Nations’ Intergovernmental Panel on Climate Change. To date, there are 77 commercial projects in operation globally capturing up to 64 million tonnes of carbon dioxide per year, with 47 more under construction. However, few of those target oil production facilities like Canada’s oil sands. Norway’s Sleipner project, for example, is the world’s first commercial CCS facility and is located in an offshore natural gas field.

Norway-based consulting firm DNV Group anticipates the world will spend some US$80 billion on CCS projects between now and 2030. Much of that investment will be focused on natural gas processing and cement and steel producers, DNV said in a report released last summer.

But there remain huge hurdles to investment. In addition to prohibitive capital costs, CCS drives up operating costs at existing plants and can be energy intensive.

In search of profitability

Canada’s cement industry has focused on CCS as part of its plan to be net-zero by 2050. To date, however, no company has made an investment in a CCS facility. “The only way to make this work is if there is a path to profitability,” says Sarah Petrevan, vice president for industrial decarbonization at the Cement Association of Canada. “And there is no path to profitability.” 

To help make CCS financially viable, Carney’s first budget seeks to increase the industrial carbon tax and make it apply to a greater percentage of a company’s emissions. The levy applies to a portion of emissions from the country’s largest polluters. It now costs $95 per tonne of carbon dioxide and is due to rise. 

A more costly carbon tax is intended to incentivize businesses to invest in multibillion-dollar emission-reduction projects, like CCS. Ottawa is also providing companies with a type of insurance, known as contracts for differences, which compensates investors if carbon prices fall below project costs.

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The industrial carbon price “plays a big role in determining the economic viability of various low-carbon projects,” Dale Beugin, research director for the Canadian Climate Institute, wrote in an explainer. “But the risk of future governments moving away from that carbon pricing pathway dilutes the policy certainty – and the incentive to invest in clean growth projects.” 

However, the levy won’t work to drive investment unless it has greater stringency and applies to a greater percentage of a plant’s emissions, Beugin argues.

The Alberta showdown

After the budget’s release, Petrevan welcomed the government’s climate-competitiveness pledges. She hedged, however, on whether the budget measures would provide a “path to profitability” for CCS projects. “Stability and predictability of the industrial carbon price are important contributors to building a positive business case for investment.” 

However, the federal government will have to find “alignment” with the provinces, Petrevan says. (Ottawa sets benchmarks for the industrial levy, but most provinces administer their own systems.) Alberta – home to the vast oil-sands sector – froze the price at $95 earlier this year. More recently, it proposed to allow a broader range of investments to count toward a company’s compliance requirements and allowed smaller firms to opt out completely.

The changes would reduce demand for the credits that companies receive when they succeed in reducing emissions. Cheaper credits would result in lower return on investment, and therefore less spending on emission-reduction technology.

The federal–Alberta memorandum signed in November commits the two sides to working together to “design and commit to globally competitive long-term carbon effective prices.” Alberta agreed to unfreeze the price to rise to $130 over the next three years.

The carbon price still won’t be enough to drive investment in CCS, says Chris Bataille, a Vancouver-based fellow with Columbia University’s Center on Global Energy Policy. With the enforcement mechanism related to pipeline progress, “it has to become basically a regulatory outcome,” he says. “That doesn’t mean post-combustion CCS will work or that the feds will enforce the deal. But Alberta gets to push forward its pipeline.”

Oil-sands companies working together under an umbrella organization dubbed the Pathways Alliance have released their own plan for emission reductions that relies on heavily subsidized CCS and a strong carbon credit market. 

The federal–provincial memorandum endorses the industry plan, and Ottawa and Alberta pledge to work with the oil companies in advancing the plan, with construction starting by 2027.

Corporate investment in CCS is contingent on the approval, commencement and continued construction of the pipeline, while ongoing progress with the pipeline will be contingent on the Pathways plan moving ahead. The federal government also agreed to drop its proposed cap on emissions from the oil and gas sector.

Bataille argues that Ottawa needs the threat of a cap as a stick. “Without the emissions cap as leverage – get these [emissions] cuts done or we will do this – I don’t see it happening,” he says. 

A subsidized market

It’s clear that without government intervention, carbon capture will not take root. The Pathways Alliance has laid out a $16.5-billion CCS plan that would require significant tax breaks. Even with those subsidies, it’s questionable how many carbon-capture projects would be built given the long-term financial risks and technological issues.

A key problem is that government policy is by its nature uncertain, especially given that Carney presides over a minority government that has a precarious hold on power. Any promise by Ottawa to set a floor under the cost of emitting and guarantee profitability for CCS could be quickly undone by a new federal government that would share Alberta’s opposition to aggressive climate action. Conservative Leader Pierre Poilievre – who came within 25 seats of winning the March election – has shown little enthusiasm for climate policy and promised to unshackle the oil and gas industry. 

In the United States, President Donald Trump has scuttled virtually all the climate measures adopted under Joe Biden.

Given those risks, corporate CEOs will be reluctant to invest in CCS projects that are bolted onto existing production facilities and generate no revenue except through regulatory means, Bataille says. The promise of a pipeline may, however, be the carrot that drives action.

Momentum continues 

Carbon capture itself isn’t novel, but its application for large-scale underground storage remains unproven over the long term. 

The fossil fuel industry already captures carbon dioxide for natural gas processing plants and injects the gas into old wells to enhance oil production. The Pathways plan would largely sequester carbon in saline aquifers rather than sell it. Worldwide, there is much less space underground for injected carbon than previously thought: less than a fifth of what the Intergovernmental Panel on Climate Change has estimated, according to a recent study by researchers at Imperial College London.

Carbon capture also isn’t widely applicable. In upstream oil-sands production, a large percentage of emissions result from burning natural gas in boilers to produce steam needed to extract bitumen, and from burning diesel in large trucks and other machinery. CCS would not currently be viable for either of those sources.

Sean McCoy, a professor at the Schulich School of Engineering at the University of Calgary, estimates that roughly 60% of carbon emissions in the oil-sands sector “might be capturable” with CCS. Despite the challenges, CCS continues to find support from government, even as the list of cancelled projects grows longer. Just last year, Edmonton-based Capital Power pulled the plug on a proposed $2.4-billion CCS project at its Genesee gas-fired generating station. “Through our development of the project, we have confirmed that CCS is a technically viable technology,” the company said in its statement. “However, at this time, the project is not economically feasible.”

The reality gap

Among the projects that have materialized, there is also a gap between carbon-capture promise and reality. A recent report from the Institute for Energy Economics and Financial Analysis (IEEFA) noted that claims of capture rates of 90% or more are misleading. Typically, the promise of higher capture rates applies only to concentrated streams of emissions at the specific types of plants.

In the oil and gas industry, CCS is used for natural gas processing plants that purify the fuel by removing contaminants like water, carbon dioxide, hydrogen sulphides and solids. And it includes facilities that produce hydrogen from gas for use in oil-sands upgraders and refineries.

Even at natural gas processing and hydrogen plants, carbon-capture rates rarely exceed 70% of emissions, the IEEFA report said.

Some projects, including at Air Products in Edmonton, are employing a new technology to produce hydrogen: autothermal reforming, which replaces steam methane reforming. Autothermal reforming is both more energy efficient and more capital intensive than the steam methane process. It also creates a more concentrated emission stream. 

CCS is best suited for applications that have high carbon dioxide concentrations in their flue gas and have high and stable flow emissions. In other words, facilities that burn hot and steady. 

Even in the bullish forecast by Norway’s DNV Group, CCS would capture only 6% of global emissions in 2050, a level that falls well short of what the consultancy says is needed to achieve any net-zero outcome.

“Recent turmoil, and budgetary pressure in the global economy pose risks to CCS deployment, potentially shifting priorities and removing the necessary finance,” the DNV authors wrote.

While some CCS will be viable, overly optimistic reliance on CCS is a trap if it is used to support delays in other emission-reduction strategies. The more we delay the transition away from fossil fuels, the more we will have to rely on hugely expensive carbon-capture strategies.

Shawn McCarthy is an Ottawa-based writer and senior counsel with Sussex Strategy Group.

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One year earlier almost to the day, then-UN Special Envoy on Climate Action Mark Carney gave the keynote address at the Sustainable Finance Forum in Ottawa, in a speech titled “Transformational Leadership.” At the time, Carney’s reputation as a climate leader was gold-plated. Regarded as one of the architects of modern sustainable finance, his Glasgow Financial Alliance for Net-Zero had corralled hundreds of major banks, insurers and asset managers to pledge funds for the energy transition. To add to his veneer, he was already being chased by reporters about his prospects for Canada’s top office.

A lot has happened in a year. Carney and his central bank bona fides soon became the hottest commodity on the Canadian political map, for an electorate that was suddenly feeling under siege by a Donald Trump White House. He won the Liberal leadership, then eked out a come-from-behind win in the federal election, upending what had looked to be the dawn of a new Conservative era in Canada.

Now, these two moments – the finance summit and the pipeline deal – mark a full turning for Carney, from climate hero to, in the eyes of some, climate villain. Even so, Carney stated his convictions clearly back at the Ottawa event in 2024. Asked if the federal government should invest in decarbonization in high-emitting industries, Carney said, “I’m suggesting we should run towards that, because that, in the end, is going to have the highest impact on the climate.”

As promised, Carney has now stamped his approval, and his reputation, on so-called decarbonized oil and the infrastructure to move it. It’s a high-stakes gamble, at a different inflection point in the climate battle than the showdowns over the Keystone XL and Trans Mountain pipeline projects. The politics are shifting, as evidenced by the shuttering of Carney’s net-zero banking alliance in October.

The myth of low-carbon oil

So-called decarbonized oil hinges on the deployment of expensive technology to snatch carbon from smokestacks and pump it underground, known as carbon capture and storage, or CCS. While there are many CCS projects already operating around the world, albeit mostly for methane gas processing rather than oil, the technology has not been proven at scale as a reliable climate solution. Critics point out that it is costly, inefficient and unlikely to ever exist independently of government subsidies.

Whether CCS turns out to make sense economically, the marketing belies the fact that oil cannot be decarbonized. It is made of carbon, and you still need to burn it to use it, which is when most of the pollution is released. The word “decarbonization” exists to set the widest possible frame around what reducing carbon dioxide emissions can mean. In this case, it means roughly 10% to 20% of the full life-cycle emissions of a barrel, and those reductions come at such a high price that any market for it is conjectural at best.

The Pathways Plus system agreed to in the new MOU, billed as “the world’s largest carbon capture, utilization, and storage project,” will cost approximately $16.5 billion to deploy in the oil sands, and that’s just for the underlying infrastructure to move the CO2 around and store it. The participating companies still need to buy their own carbon-capture units and install them at their extraction and upgrading plants.

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Few in the world of net-zero finance are buying it. Carney is “legitimizing doublespeak,” says Kyra Bell-Pasht, director of research and policy at Investors for Paris Compliance. “By using greenwashing terms like ‘decarbonized oil’ on his pulpit, he is setting a standard of misinformation at the highest level,” she writes in an email.

Carney has already paid a high political cost for backing the oil and gas industry’s plan to increase production in the era of climate consequences. Just hours after the deal was signed, former environment minister Steven Guilbeault quit his new cabinet post as minister of Canadian culture, saying that he could not have looked himself in the mirror if he’d gone along with the prime minister. Two core members of the Net-Zero Advisory Body, which gives guidance to the government on reducing emissions, also stepped down over the pipeline deal: Catherine Abreu, director of the International Climate Politics Hub, and Simon Donner, the group’s co-chair. The Assembly of First Nations chiefs passed a unanimous emergency resolution echoing coastal leaders who say the project “will never happen,” while B.C. Premier David Eby was more tepid but still dismissed the deal as a “distraction.”

Premier Smith, too, paid a price for collaborating with Ottawa, which Alberta premiers can little afford to be seen doing. She was loudly booed at her party’s annual general meeting just a few days after signing the MOU.

More than half of Canadians still support the proposed pipeline, but any push by Carney would surely be a long, bruising effort, and the prize at the end looks very much in doubt. At the Sustainable Finance Forum in 2024, he told the crowd, “We may be the first generation that understands the risks associated with climate change. We’ll also be the last generation that can do anything about it.” Building an oil pipeline is not something most people in that room would have picked for a next step.

Mark Mann is the managing editor at Corporate Knights. He is based in Montreal. 

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A new report from the NewClimate Institute, a European think tank, finds that 35 of the world’s biggest businesses are leaning on short-term tree-planting and other forms of “nondurable” carbon removal in order to say they’ve neutralized some of their climate pollution. The handful of companies investing in more reliable carbon removal are mostly not doing so in conjunction with deep decarbonization, or the elimination of carbon emissions altogether.

There is a “dangerous mismatch between corporate climate claims and the reality of what is needed to reach global net-zero,” the organization said in a press release. Reaching net-zero by the middle of the century – a scenario where all unavoidable human-caused climate pollution is cancelled out via carbon removal – is considered necessary to limit global warming to 1.5°C.

Carbon dioxide removal, or CDR, refers to efforts to capture carbon dioxide after it’s been emitted into the atmosphere and store it in rocks, land, ocean reservoirs or human-made products. The most reliable types of carbon removal, which the NewClimate Institute calls “durable CDR,” involve injecting carbon into geological formations or turning it into rocks, where it will stay put for at least 1,000 years – about the same amount of time that carbon dioxide from the burning of fossil fuels will remain in the atmosphere.

Currently, these durable techniques don’t work at scale: they account for just 0.1% of global carbon removal each year. The rest is based on methods like planting trees, restoring wetlands and burying carbon in the soil, which are much cheaper but can keep carbon out of the atmosphere for only decades or a few centuries at most.

Government investment and regulations are needed to scale up durable CDR – experts consider the next decade to be “crucial” for developing the technology – but the private sector can help, too, by funding durable CDR projects and research. In industries like construction, for which total decarbonization is not yet possible, companies will likely need to use durable CDR to offset residual emissions as part of a credible climate strategy.

The NewClimate Institute authors looked at 35 of the world’s largest companies across seven sectors: agrifood, aviation, automobiles, fashion, fossil fuels, tech and utilities. Tech companies showed the most investment in durable CDR – Microsoft alone is responsible for 70% of all durable CDR ever contracted – but the report criticizes the sector for planning to claim “potentially significant amounts” of both durable and nondurable CDR toward net-zero targets. Tech companies can fully decarbonize without offsets, so their emissions targets should not depend on carbon removal.

Aviation was the other sector showing the greatest support for durable CDR, but only one airline – Japan’s All Nippon Airways – had a “reasonable” plan to use the technology to neutralize residual emissions by 2050. Three airlines lacked concrete plans.

Of the 15 companies across the agrifood, automobiles and fashion sectors, only H&M and Stellantis are investing in durable CDR. Two of the five utilities in the report, Eon and Ørsted, are supporting durable CDR projects, but it’s unclear whether Eon intends to use removals to count toward its net-zero goal, and the NewClimate Institute says some of Ørsted’s removals are being double-counted in the emissions-reduction targets of both Denmark and Microsoft. The five fossil fuel companies analyzed – Equinor, ExxonMobil, Shell, Sinopec and TotalEnergies – are focusing mostly on carbon capture and storage, which intercepts carbon dioxide at the point of emission, before it escapes into the atmosphere, and does not reduce atmospheric carbon dioxide concentrations.

Silke Mooldijk, an expert with the NewClimate Institute and the lead author of the new report,  says she wasn’t surprised to find limited support for durable CDR, except from some tech companies. What did surprise her was that companies investing in durable CDR projects did not publicly report any information on these projects’ environmental and social risks. Some CDR methods, for example, may jeopardize biodiversity, while others require large amounts of renewable energy that would have to be diverted from other uses. “Not a single company in our report disclosed details on potential risks of projects they support and how they mitigate those,” Mooldijk tells Grist.

Grist reached out to all 35 companies included in the report. Adidas, Amazon, Enel, Google, H&M, Inditex, Microsoft and TotalEnergies responded by describing their net-zero commitments. Adidas and Enel, which are not currently investing in durable CDR, said they would use “high-quality” carbon removals to offset their residual climate pollution after taking actions to decarbonize; Inditex said it is “exploring” durable CDR to offset residual emissions, and its use of the technology “will be determined by the evolution of reference scientific frameworks.”

Amazon, Google, Microsoft and H&M are currently investing in durable CDR. A spokesperson for H&M described the fast-fashion company’s purchase of 10,000 metric tons of durable CDR from the Swiss company Climeworks, one of the largest purchases to date, and said H&M plans to use them to neutralize residual emissions. The tech companies affirmed their commitment to reduce emissions first and then use carbon removal to offset residual emissions, though none of them addressed NewClimate Institute’s concerns that they would use large amounts of durable and nondurable CDR to claim progress toward net-zero.

A statement provided to Grist from TotalEnergies did not address CDR. It instead described the company’s support for carbon capture and storage and “nature-based solutions.” The latter refers to short-lived offsets, such as tree-planting, that the NewClimate Institute does not believe are appropriate for offsetting fossil fuel emissions.

Apple, Duke Energy and Shein declined to comment after seeing the report. The remaining 24 companies did not respond to inquiries from Grist.

Jonathan Overpeck, a climate scientist at the University of Michigan and the dean of its School for Environment and Sustainability, says the NewClimate Institute report is timely. “Right now the whole idea of CDR . . . is kind of a Wild West scene, with lots of actors promising to do things that may or may not be possible,” he says. He adds that companies appear to be using CDR as an alternative to mitigating their climate pollution. “The priority has to be on reducing emissions, not on durable CDR at this point,” he tells Grist.

In the near term, durable CDR is doing virtually nothing to offset emissions. As of 2023, only 0.0023 gigatons of carbon dioxide were removed from the atmosphere each year using these methods. That’s about 15,000 times less than the annual amount of climate pollution from fossil fuels and cement manufacturing.

According to the NewClimate Institute, voluntary initiatives are no substitute for government-mandated emission-reduction targets and investments in durable CDR. To the extent that these initiatives exist, however, the organization says they should provide a clearer definition of what constitutes “durable” carbon removal; determine companies’ responsibility for scaling up durable CDR based on their ongoing and historical emissions, or – perhaps more realistically – on their ability to pay; and require companies to set separate targets for emission reductions and support for durable CDR. The last recommendation is intended to reinforce a climate action hierarchy that puts mitigation before offsetting. Companies should not “hide inaction on decarbonization behind investments in removals,” as the report puts it.

Mooldijk says voluntary initiatives can incentivize investments in durable CDR by recognizing “climate contributions.” These might manifest as simple statements about companies’ monetary contributions to durable CDR, instead of claims about the amount of carbon dioxide that they have theoretically neutralized.

Some of these recommendations were submitted earlier this year to the Science Based Targets initiative, the world’s most respected verifier of private-sector climate targets. The organization is getting ready to update its corporate net-zero standard with new guidance on the use of CDR. Another standard-setter, the International Organization for Standardization, is similarly preparing to release new standards on net-zero, which could curtail some of the most questionable corporate climate claims while also drumming up support for durable CDR.

John Reilly, a senior lecturer emeritus at the MIT Sloan School of Management, says that ultimately, proper regulation of corporate climate commitments – including of durable CDR – will fall on governments. Companies “are happy to throw a little money into these things,” he says, “but I don’t think voluntary guidelines are ever going to get you there.”

This article originally appeared in Grist. It has been edited to conform with Corporate Knights style. Grist is a non-profit, independent media organization dedicated to telling stories of climate solutions and a just future.

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Billions of taxpayer dollars once intended to help fight climate change by subsidizing capture and storage of carbon dioxide may instead go to fossil fuel companies to help boost production of oil – one of the main drivers of climate change.

In a February 19 call with investors, Vicki Hollub, chief executive officer of Occidental Petroleum, said she’s had several conversations with President Donald Trump, arguing the “business case” for federal support for carbon capture. “We believe the next round of technology that’s going to add significant barrels . . . will be production that comes from the use of CO2 in enhanced oil recovery,” Hollub said. “And that 50 billion to 70 billion barrels would extend our energy independence by more than 10 years. It’s critically important.”

The United States produced about five billion barrels of oil in 2023. Hollub calls carbon capture a way to keep the oil industry alive amid the international calls to reduce reliance on fossil fuels.

What is enhanced oil recovery?

In enhanced oil recovery, pressurized carbon dioxide is used to force oil out of aging wells. The process is used to produce about 2% of the nation’s oil. Hollub said the industry is turning to carbon captured from industrial sources as the supply of naturally occurring carbon dioxide has dwindled.

Depending on conditions, producing oil using captured carbon can offset the climate impacts of a barrel of oil, making it less carbon intensive. But because new oil supplies lower the market price of oil, it could increase demand for oil, raising overall carbon emissions, according to one analysis by the Clean Air Task Force, which supports carbon capture.

Charles Harvey, professor of civil and environmental engineering at the Massachusetts Institute of Technology, told Floodlight that the net climate impact of using captured carbon for enhanced oil recovery “gets super complicated.”

The pivot from carbon capture as a climate solution to a boost for oil comes as the Trump administration seeks to cut or kill climate-related spending, including billions set aside for carbon capture and sequestration, while also ordering the federal government to pave the way for more fossil fuel production.

A ‘perverse incentive’ for oil companies

Support of carbon capture, though, might alienate a key Trump ally.

The Heritage Foundation and its Project 2025 – which is serving as a blueprint for Trump’s second term – argue that federal incentives for carbon capture should be scrapped. “Most carbon capture technology remains economically unviable, although private-sector innovations are on the horizon,” according to Project 2025. “[Carbon capture utilization and sequestration] programs should be left to the private sector to develop.”

Critics also question the safety of the technology, noting that leaks from pipelines have sent dozens of people to the hospital and forced evacuation orders.

During the Biden administration, Congress allocated about US$8.2 billion to carbon capture projects and increased a tax credit for carbon capture that the U.S. Treasury has estimated will cost $30 billion through 2032.

If Trump allows the carbon capture incentives to stay in place, oil companies could increase production at a time when the international consensus is that no new oil should be produced if the world is to keep climate change in check.

The subsidies “create a perverse incentive, because for companies to qualify for the subsidies, carbon dioxide must be produced, then captured and buried,” Harvey and Kurt House wrote in an opinion piece in The New York Times. The two co-founded the first privately funded carbon capture company in the early 2000s. They left the company when it began selling carbon for enhanced oil recovery.

Occidental has invested heavily in carbon capture, including buying a carbon technology firm for US$1 billion in 2023. The multinational oil company, which bills itself as an industry leader in seeking low-carbon solutions, also is developing a federally supported facility in Texas that would capture carbon directly from the atmosphere, a process called direct air capture.

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While most carbon capture projects are designed to take carbon from a facility’s emissions – such as from a power or chemical plant – direct air capture filters and captures 0.4% of carbon dioxide directly from the ambient air. If Trump allows federal support for the project to continue, Occidental subsidiary 1PointFive stands to receive at least $500 million from the Department of Energy.

‘The last best hope of the fossil fuel industry’

Compared with other funding approved under the Inflation Reduction Act targeted by Trump, such as for solar energy and offshore wind, carbon capture “is in a good place relative to some of the other clean energy tax credits,” said Jessie Stolark, executive director of the Carbon Capture Coalition. “And I would say we’re cautiously optimistic as far as our positioning,” she said. “But, you know, it’s just kind of a moving target at this point.”

Before the incentives, companies had no way to make money from capturing carbon other than to sell it to oil companies for enhanced oil recovery. But since carbon capture incentives were boosted under Biden, more than 270 carbon capture and storage projects have been announced.

Some projects are in limbo as they await direction from the federal government, Stolark said. “There’s more uncertainties, certainly for folks who have federal grants awarded or under contract, given the federal funding freeze, and the different memos and directives that have come out.” 

Stolark’s group and more than 160 other companies and organizations signed a letter to congressional leadership after Trump’s inauguration, urging the lawmakers to maintain support for carbon capture.

One bill introduced this year in Congress would give companies that use captured carbon to recover oil the same amount of tax credit as they receive to permanently store it underground – eliminating the incentive to do so.

Carbon capture incentives are “another subsidy for oil,” said Carolyn Raffensperger, executive director of the non-profit Science and Environmental Health Network, which produced a report last year on the “false promises” of using captured carbon dioxide to produce oil.

The report concludes that using carbon dioxide for enhanced oil recovery is “the last best hope for the fossil fuel industry to keep pumping oil out of the ground. It must end.”

This article was originally published by Floodlight, a non-profit newsroom that investigates the powerful interests stalling climate action. It has been edited to conform with Corporate Knights style.

Pam Radtke is an environment, energy and climate reporter. A long-time New Orleans resident, Radtke was part of the Times-Picayune team that published after Hurricane Katrina.

The post The oil industry is selling carbon capture as a way to boost production appeared first on Corporate Knights.

“It damages their teeth, and eventually the cows or goats die,” Kitol says. The thickets also provide cover for predators like wild dogs and hyenas. “They hide there because it is so thick that you can’t see them. At night, when the goats or sheep walk around, they are attacked and killed.”

Last year, experts with Penn State’s PlantVillage project, which helps smallholder farmers adapt to climate change, arrived to train Kitol and others in the area on a clever way to turn mathenge from a problem into an asset. Workers gather up those troublesome weeds – biomass – and convert them into biochar, concentrated carbon that they “charge” with nutrients by mixing it with manure. Farmers then apply the mixture to their fields, sometimes planting grass that provides fodder for livestock. Kitol says that the biochar helps his soils retain water and improves their fertility, leading to higher yields.

Well beyond Kenya, biochar is having a moment: the worldwide market was worth $600 million last year and could rise to more than $3 billion next year. Anywhere people are producing waste biomass – corn stalks, weeds, dead trees – they’re also producing a powerful tool for sequestering carbon and improving soils. And if farmers can prove how much biomass they’re turning into biochar, they can prove how much carbon they’re putting back into the ground. Through a group like PlantVillage, a company can then pay those farmers to offset its carbon emissions. (Biochar in general accounts for more than 90% of durable carbon credits that have already been delivered worldwide.)

So with biochar, farmers are getting a new source of income and a way to better retain rainwater and boost yields. They’re helping mitigate climate change while adapting to its ravages. “Helping to solve an invasive species and land degradation problem, and produce biochar at the same time, is amazing,” says James Gerber, a data scientist who studies agriculture at the non-profit climate group Project Drawdown. “Anything that gets money into the hands of smallholder farmers in Africa is probably just a good thing. But if it’s part of a functional, verifiable carbon-credit program, even better.”

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The trick to making biochar is pyrolysis. As people have known for millennia, if you expose biomass to very high temperatures but in a low-oxygen environment, it doesn’t combust into all-consuming flames; it turns into a kind of charcoal. Companies can do this with big industrial chambers, producing the biochar you can buy for your garden. Smallholder farmers can do it by digging a pit and adding biomass in layers, which restricts oxygen to the smouldering fire at the bottom. A simple kind of metal kiln does the same.

Whatever the method, the plant material isn’t fully combusting and billowing smoke. With biochar, you end up with concentrated, solid carbon. “It’s essentially coal,” says David Hughes, the founder of PlantVillage. “It goes into the ground and it doesn’t break down, and this is because of the temperature you’ve exposed it to.”

Because biochar is so spongy, it helps the soil retain more water – an especially welcome trait given the worsening droughts in Africa and elsewhere. But that sponginess also demands special care when applying to a field. “If you just put biochar into the soil, it will suck up all the nutrients in there, and your plants will do worse,” Hughes says. “So you have to charge it with nutrients. You can do that with compost or NPK – nitrogen, phosphorus, potassium – blends.”

Traditionally, a farmer might burn piles of waste like corn stalks, emitting carbon into the atmosphere. If different farms across a landscape are doing this after a harvest, air quality plummets and imperils human health.

So for a group like Biochar Life, which provides carbon-removal offsets for biochar, the first step is to get a farmer to stop processing their waste biomass the old way. “We need to prove that the farmer didn’t burn it or just leave it there and let the biomass decompose and create methane,” says Aom Kwanpiromtara Suksri, the co-founder and global head of development and compliance at Biochar Life, which has offices in Asia and Africa and has formed a partnership with PlantVillage.

To be sure, carbon offset systems have been plagued with problems. One is a perverse incentive to deforest an area and plant trees again, selling those credits to companies. Where there’s been deforestation from logging or agriculture, planting a bunch of a single species of tree doesn’t create a proper ecosystem. There’s no boost to biodiversity, and tree plantations don’t sequester nearly as much carbon as a real forest.

By contrast, Biochar Life says that its offset system is easier to quantify and that it’s so far distributed more than $300,000 to farmers, and $265,000 to local teams that verify the credits. “We can’t generate a credit until we’ve proven that we’ve generated biochar, and that biochar has been charged and put back into the ground,” says Matt Rickard, Biochar Life’s chief operating officer.

Then there’s an issue of permanence: if farmers plant a bunch of trees and a drought strikes, and those trees all wilt or catch on fire, their carbon is going right back into the atmosphere. Scientists are still working out how long biochar can last in different kinds of soils and climates, but indications are that it can last thousands or possibly millions of years. And compared to waiting for a tree to grow and capture carbon, adding biochar to soil sequesters the carbon in the ground immediately.

“Biochar, it’s kind of chemically locked in – it’d be very difficult to reverse that,” Gerber says. “For me, that is the most important reason that biochar has greater potential for carbon credits.”

And unlike planting a new forest and walking away, farmers can keep producing biomass, charging it with nutrients, and adding it to the soil year after year. At the very least, a smallholder farmer like Kitol is getting a better handle on an invasive species while boosting yields and preparing his soils for the drier times ahead. “I see the future of biochar as promising,” he says. “Biochar will be widely used as more people recognize its benefits.”

This article originally appeared in Grist. It has been edited to conform with Corporate Knights style. Grist is a non-profit, independent media organization dedicated to telling stories of climate solutions and a just future. Learn more at grist.org. 

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The group’s report, titled Funding Failure, focuses on international spending on carbon capture and fossil-based hydrogen subsidies, which continues despite ample data showing that the technological fixes have “failed to make a dent in carbon emissions” after 50 years of research and development.

The report details how five countries account for 95% of all carbon capture spending, with the U.S. investing the most taxpayer money in the technology, at $12 billion in subsidies over the last 40 years.

Norway comes in second with $6 billion going to carbon capture and storage, while Canada has spent $3.8 billion, the European Union has spent $3.6 billion, and the Netherlands has poured $2.6 billion into the technology, with which carbon dioxide emissions are compressed and utilized or stored underground.

Harjeet Singh, global engagement director for the Fossil Fuel Non-Proliferation Treaty Initiative, told The Guardian that the subsidies amount to a “colossal waste of money.”

“It is nothing short of a travesty that funds meant to combat climate change are instead bolstering the very industries driving it,” Singh said.

While proponents claim that carbon capture and storage reduces planet-heating carbon emissions, OCI notes, it was originally developed in the 1970s “to enhance oil production, and this remains its primary use,” with the technology “barely” reducing emissions.

High-profile carbon capture failures in the U.S. include the Petra Nova project in Houston, Texas, which cost nearly $200 million in taxpayer funds and whose captured emissions were later used for crude oil production, and the FutureGen project, “which swallowed $200 million and never materialized.”

“Investing in carbon capture delays the transition to renewable energy,” OCI’s report says. “Instead of wasting time and money on technologies that do not work, governments must commit to justly and urgently phasing out fossil fuels before it’s too late.”

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Despite the lack of data supporting the use of carbon capture, the group said, countries including the U.S. are “preparing to waste hundreds of billions of taxpayer dollars on these ineffective technologies, further benefiting the fossil fuel industry.”

OCI highlighted how the U.S. and Canada, while ostensibly fighting the climate crisis, have spent a combined $4 billion in public money to explicitly “pay oil companies to produce more oil,” with the subsidies going to carbon capture for “enhanced oil recovery.”

The report also found that in addition to the $12 billion in taxpayer funds the U.S. has spent on carbon capture and fossil hydrogen – a leak-prone gas produced through energy-intensive processes that cause their own emissions – the government has spent an estimated $1.3 billion on the 45Q tax credit, which allows companies to write off tax for every ton of carbon dioxide they store underground.

The Inflation Reduction Act (IRA) increased the amount given to companies in 45Q tax credits from $35 to $60 per ton, meaning that the subsidy could grow to more than $100 billion in the next 10 years.

OCI’s Policy Tracker shows that overall public spending on carbon capture and hydrogen could grow by between $115 billion and $240 billion in the coming decades.

“We need real climate action, not fossil fuel bailouts!” OCI said in a post on social media.

The group’s report also highlights that fossil fuel giants such as ExxonMobil have shifted from carbon capture skeptics to outspoken proponents of the technology – with the company bragging to investors that carbon capture and hydrogen would help its Low Carbon Business Unit make “hundreds of billions of dollars” and grow to be “larger than ExxonMobil’s base business.”

Exxon didn’t launch its carbon capture efforts until 2018, having spent several years and hundreds of millions of dollars on another “climate solution” that ultimately failed: the use of algae to make biofuels.

Since then, Exxon has “pushed for direct government funding for carbon capture, particularly at the U.S. Department of Energy (DOE),” successfully lobbying for $12 billion allocated in the Bipartisan Infrastructure Bill in 2021 for “carbon management research, development, and demonstration.”

Exxon also lobbied for the increased rate of the 45Q tax credit in the IRA and “played a ‘central role’ in drafting a 2019 DOE-sponsored report on carbon capture that determined Congress would need to create an incentive of around $90 to $110 per ton to support carbon capture deployment,” according to OCI.

The Guardian on Thursday reported that Exxon still “chases billions in U.S. subsidies for a ‘climate solution’ that helps drill more oil,” describing how the oil giant hosted an event at the Democratic National Convention earlier this month where senior climate strategy and technology director Vijay Swarup praised the IRA for helping Exxon pursue carbon capture and said: “We need new technology and we need policy to support that technology. We need governments working with private industry.”

Exxon’s enthusiasm for carbon capture, OCI said, is an example of how “the fossil fuel industry delays climate action, distracts from real solutions that would end the fossil fuel era, and does everything in its power to squeeze the last drops of profit from a dying industry, at the expense of all of us.”

This article by Common Dreams is published here as part of the global journalism collaboration Covering Climate Now. It has been edited to conform with Corporate Knights style.

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The effort stores around 1 million metric tons of CO2 per year — and is praised by many as a pioneering success in global attempts to cut greenhouse gas emissions.

Last year, total global CO2 emissions hit an all-time high of around 35.8 billion tons, or gigatons. At these levels, scientists estimate, we have roughly six years left before we emit so much CO2 that global warming will consistently exceed 1.5°C above average preindustrial temperatures, an internationally agreed-upon limit. (Notably, the global average temperature for the past 12 months has exceeded this threshold.)

Phasing out fossil fuels is key to cutting emissions and fighting climate change. But a suite of technologies collectively known as carbon capture, utilization and storage, or CCUS, are among the tools available to help meet global targets to cut CO2 emissions in half by 2030 and to reach net-zero emissions by 2050. These technologies capture, use or store away CO2 emitted by power generation or industrial processes, or suck it directly out of the air. The Intergovernmental Panel on Climate Change (IPCC), the United Nations body charged with assessing climate change science, includes carbon capture and storage among the actions needed to slash emissions and meet temperature targets.

Governments and industry are betting big on such projects. Last year, for example, the British government announced £20 billion (more than US$25 billion) in funding for CCUS, often shortened to CCS. The United States allocated more than $5 billion between 2011 and 2023 and committed an additional $8.2 billion from 2022 to 2026. Globally, public funding for CCUS projects rose to $20 billion in 2023, according to the International Energy Agency (IEA), which works with countries around the world to forge energy policy.

Given the urgency of the situation, many people argue that CCUS is necessary to move society toward climate goals. But critics don’t see the technology, in its current form, shifting the world away from oil and gas: In a lot of cases, they point out, the captured CO₂ is used to extract more fossil fuels in a process known as enhanced oil recovery. They contend that other existing solutions such as renewable energy offer deeper and quicker CO₂ emissions cuts. “It’s better not to emit in the first place,” says Grant Hauber, an energy finance adviser at the Institute for Energy Economics and Financial Analysis, a nonpartisan organization in Lakewood, Ohio.

What’s more, fossil fuel companies provide funds to universities and researchers — which some say could shape what is studied and what is not, even if the work of individual scientists is legitimate. For these reasons, some critics say CCUS shouldn’t be pursued at all.

“Carbon capture and storage essentially perpetuates fossil fuel reliance. It’s a distraction and a delay tactic,” says Jennie Stephens, a climate justice researcher at Northeastern University in Boston. She adds that there is little focus on understanding the psychological, social, economic and political barriers that prevent communities from shifting away from fossil fuels and forging solutions to those obstacles.

According to the Global CCS Institute, an industry-led think tank headquartered in Melbourne, Australia, of the 41 commercial projects operational as of July 2023, most were part of efforts that produce, extract or burn fossil fuels, such as coal- and gas-fired power plants. That’s true of the Sleipner project, run by the energy company Equinor. It’s the case, too, with the world’s largest CCUS facility, operated by ExxonMobil in Wyoming, in the United States, which also captures CO₂ as part of the production of methane.

Granted, not all CCUS efforts further fossil fuel production, and many projects now in the works have the sole goal of capturing and locking up CO₂. Still, some critics doubt whether these greener approaches could ever lock away enough CO₂ to meaningfully contribute to climate mitigation, and they are concerned about the costs.

Others are more circumspect. Sally Benson, an energy researcher at Stanford University, doesn’t want to see CCUS used as an excuse to carry on with fossil fuels. But she says the technology is essential for capturing some of the CO₂ from fossil fuel production and usage, as well as from industrial processes, as society transitions to new energy sources. “If we can get rid of those emissions with carbon capture and sequestration, that sounds like success to me,” says Benson, who codirects an institute that receives funding from fossil fuel companies.

Born from the oil industry

CCUS technology was not conceived as a climate solution. It dates to the 1970s and 1980s, when oil production in the United States began to decline. Oil companies started using a process called enhanced oil recovery that injects CO₂ (or water) into sedimentary rocks to recover hard-to-reach dregs of oil, a precursor to today’s CCUS.

CCUS technologies are now capturing CO₂ from a variety of operations — including at traditional power plants that burn coal or other fossil fuels; in nontraditional plants where energy is produced from biofuels such as ethanol; and during the production of ammonia, which is used in fertilizer. All such efforts complement other practices that turn to natural processes to remove carbon from the atmosphere to help reach net zero, such as planting forests or locking CO₂ in soils using sustainable farming practices.

The strongest criticisms are lobbed at using CCUS to extract fossil fuels. Today nearly three-quarters of the carbon captured through CCUS projects is used to extract more oil from dregs. The largest CCUS operation, ExxonMobil’s $656 million Shute Creek facility in Wyoming, aims to capture around 8 million tons of CO₂ each year from methane extracted from the nearby LaBarge gas fields. ExxonMobil sells the captured CO₂ for enhanced oil recovery. Though the effort cuts emissions because some of the CO₂ remains in the ground, the burning of the additional fossil fuels it helps extract still releases CO₂.

Just 12 of the 41 existing projects included in the Global CCS Institute database inject CO₂ with the exclusive aim of storing it underground, thus keeping its climate-warming effects at bay. Half of those 12, including the Sleipner project, are involved in methane production — and methane releases carbon dioxide into the atmosphere when burned.

Cement manufacturing and iron and steel manufacturing are also desirable targets for CCUS, because each produces around 6% to 9% of global CO₂ emissions, and both processes are difficult to clean up in other ways. Only one project, run by the Abu Dhabi National Oil Company, is capturing CO₂ emissions from iron and steelmaking. There are no projects up and running to capture CO₂ from cement manufacturing.

The Global CCS Institute’s database includes just a single fully operational, large-scale project that is currently sucking CO₂ directly from the air and storing it underground. That project, in Hellisheiði, Iceland, is run by the Swiss company Climeworks. Another, bigger Climeworks project recently started operations but is not yet completed.

But the database omits direct air capture projects that are doing other things with the CO₂, including one that is sealing it in concrete, and omits smaller-scale and pilot projects that are online or coming online.

A decade ago in a paper in the Annual Review of Environment and Resources, Benson and Heleen de Coninck, a climate change researcher at the Eindhoven University of Technology and Radboud University in the Netherlands, wrote that, to help mitigate climate change, CCUS needs to serve more than fossil fuel companies seeking to extract oil. In the decade since, Benson notes, CCUS has been slow to expand into other areas largely because of a lack of public policies supporting the technologies, such as government subsidies for new projects or a tax on CO₂ emissions that would make it cheaper to sequester than to emit it. However, she notes, this is now changing.

Looking to the future

CCUS may be poised to turn a corner. As of July 2023, 351 new commercial-scale CCUS projects were in the works, according to the Global CCS Institute. Many of these forthcoming projects will capture CO₂ with the exclusive goal of burying it underground rather than using it to squeeze out more oil. Around 22 of the projects are aimed at capturing CO₂ at cement plants and five will capture CO₂ directly from the air and store it underground. Still, a connection with fossil fuels remains: Around 30 will serve methane production, and others are planned for carbon capture at coal- and gas-fired power plants.

Even with this new bloom of projects, it’s not clear that the technology has a large part to play in solving our climate woes, says Sean O’Leary, a senior researcher in energy and economics at the Ohio River Valley Institute, a clean-energy think tank based in Johnstown, Pennsylvania.

Current and future projects are unlikely to capture carbon in sufficient quantities to make much of a dent on global emissions, O’Leary says. Estimates suggest that existing projects could capture around 50 million tons of CO₂ annually — cutting the more than 35 billion tons of gross global carbon emissions by around 0.14%. Once all 392 projects are online, they could capture a few hundred million tons — about 1% of carbon emissions. Estimates of how much carbon CCUS needs to capture to help achieve climate goals vary widely between 1 billion and 30 billion tons annually by 2050.

A recent analysis suggests that at least 5 billion tons annually is achievable. The research, not yet published, limits CCUS growth to an average of 20% per year until 2050 for most cases. “That’s a major contribution to climate mitigation,” says Samuel Krevor, an environmental engineer at Imperial College London and a lead author of the research. Krevor, like many researchers in the field, receives some funding from fossil fuel companies.

But Hauber says the contribution is likely to be minor relative to other climate solutions, including shifting to renewable energy and planting and maintaining forests to help store away CO₂ from the atmosphere. Using data from the IPCC, Hauber and colleagues calculate that by 2030, CCUS will provide just 2.4% of all emissions reductions.

What’s more, projects rarely meet their stated goals. An analysis by the Institute for Energy Economics and Financial Analysis of 13 key CCUS projects, published in 2022, found that most failed to reach their targets. Relying on publicly available data, the analysis found, for example, that the Shute Creek facility has underperformed by 36% over its lifetime. When there were fewer customers for the captured CO_2, the analysis finds, the facility released it into the atmosphere. A facility in Decatur, Illinois, run by Archer Daniels Midland, an agribusiness based in Chicago, was nearly 50% off its annual target at the end of 2020.

An ExxonMobil spokesperson said the company has made progress since the report, noting that the company has expanded CO₂ storage capacity at its Shute Creek facility by over 1 million metric tons annually. And a spokesperson for Archer Daniels Midland said that how much CO₂ it captures and stores depends on how much biofuel it produces. The company’s Decatur facility is looking at different strategies to decarbonize its operations including capturing CO₂ produced by a new gas power plant that will provide energy for the company’s biofuel facility.

It’s also unclear how much CO₂ capacity underground storage sites possess. Most global estimates suggest that between 10,000 billion and 30,000 billion tons of underground storage is available. Some estimates put it as a high as 55,000 billion tons. But Chris Greig, a chemical engineer at Princeton University who previously worked on a CCUS project for the fossil fuel industry, notes that those volumes could be way off. Assessments are based on estimates of the pore space in different geologic formations — those pores provide open spaces that can hold CO₂ — which gives only a rough picture, he says: “Subsurface storage is by nature uncertain.”

Such uncertainties have caused projects to veer off course, including a $2.7 billion project to separate CO₂ from methane in gas fields in In Salah, Algeria, and store it 1.9 kilometers underground. The energy company Equinor and its partners started injecting CO₂ there in 2004 with the aim of storing 1.1 million tons annually. But it suspended operations because of limits in underground capacity, according to an Equinor spokesperson. There were concerns that the gas was escaping up toward the cap rock, which acts as a final safety net sealing the CO₂ in place.

Related:

• Most carbon capture and storage projects are failing, researchers say
• Six places to store a trillion tonnes of carbon
• Capturing carbon dioxide from the air could take more energy than all homes combined, says Shell
  

On top of the uncertainty, money is a problem. Some skeptics say that the costs of building and operating CCUS projects ultimately make them unviable. According to 2019 data from the IEA, the costs of capturing CO₂ range from $15 to $120 per ton, depending on how dilute the gas stream is. Cost estimates for capturing CO₂ directly from the air, where it is very dilute, typically vary between $225 and $500 per ton, with some estimates as high as $1,000 per ton. Multiply that price tag by even a small portion of the 1 billion tons of CO₂ that the IPCC says needs to be removed from the atmosphere by 2050, and the costs quickly add up.

Some experts point out that these costs will likely go down as the technologies mature and if the market increases, though not necessarily on the same scale as the dramatic costs reductions seen for solar and wind power technology. For example, the IEA notes that costs for CO₂ capture from coal-fired power plants dropped from over $100 per ton in 2014 to $65 per ton in 2017, and it estimates that in projects built from 2025 to 2027, the cost will be around $45 per ton.

Partly because of the costs, CCUS should be prioritized for cases where there are no other reasonable approaches to reducing CO₂ emissions, says Sabine Fuss, a climate economist at the Mercator Research Institute on Global Commons and Climate Change and at Humboldt University of Berlin. She does, though, see a potential role for direct air capture despite its expense. And while researchers are divided on the feasibility of direct air capture, Fuss thinks it needs to be funded regardless. If the world overshoots its climate targets, she says, we will likely need this technology to reach net-zero emissions and forestall even worse effects of climate change.

How big a role CCUS will eventually need to play is up to us and what we do now, Fuss says. But given the uncertainties, we can’t continue to burn fossil fuels and release carbon and count on CCUS to clean it up afterward. “We have to do all that we can to reduce emissions in the short to medium term rather than rely on CO₂ removals in the longer run,” she says.

This article by Knowable Magazine is published here as part of the global journalism collaboration Covering Climate Now.

The post Can carbon capture be a meaningful climate solution? appeared first on Corporate Knights.

His startup, Rewind, wants to sequester a gigaton of carbon each year — about 10 percent of what climate scientists deem necessary each year to reach net zero by 2050 — in a remarkably simple way. The elevator pitch goes like this: Gather millions of tons of agricultural waste and send it to the bottom of the Black Sea, where it won’t decay. Wilder still, an ancient Greek ship that sank 2,400 years ago helped inspire the idea.

At first glance, the proposal might seem counterintuitive. The carbon that plants absorb from the atmosphere through photosynthesis is released when they decompose (or, alas, are compressed over eons to make fossil fuels). This is where the Black Sea comes in. Unlike most other large bodies of water, it is mostly anoxic, meaning there is precious little oxygen — and almost none at all at depths beyond 300 feet or so. It takes a long time for anything to biodegrade down there, which explains why dozens of intact shipwrecks litter its floor.

After selling his software company to Google in 2019, Amar pondered growing seaweed to sequester carbon, but realized that anything it captured would eventually return to the atmosphere. He put the sequestration idea aside until he met Peter Kroust, a German marine biologist who suggested stashing carbon in the Black Sea — something that occurred to him after cycling along the Danube and seeing tons of agricultural waste headed downriver. “And at that point, it was just like a click,” Amar said with a laugh. After getting initial funding (he wouldn’t say how much), they launched Rewind in Tel Aviv last year.

It’s an intriguing idea, and Rewind, which employs 12 people, just wrapped up a year-long experiment in the Black Sea and the Sea of Galilee (portions of which are anoxic) that suggests it could work. The research team left a bit more than 650 pounds of hardwood submerged in a linen bag at a depth of 820 feet. The material retained 97% of its biomass over the 12 months that followed. “We saw that there is some degradation over the first three months, and then from three months on it stayed mostly consistent,” Amar said. “That’s really great.”

In their control of pine submerged in normal water, the researchers recorded 10 percent degradation in six months. The reduced rate of decay in anoxic water can be attributed to lignin, a key organic polymer, found in the tissue of most plants, that does not break down without oxygen. Amar’s team plans further experiments at depths of 3,200 feet, followed by two deposits to be made more than a mile down.

Similar tests with wheat stalk, corn stover and grapevines revealed varying levels of decay, but Amar said this small amount of degradation won’t be a problem 7,200 feet beneath the surface. “Whatever does break down will stay in the deep Black Sea and will not mix and float back up into shallower layers where it can come in contact with the air,” he said.

According to Amar, carbon dating shows that the deepest parts of the Black Sea haven’t had contact with the air in two millennia, making it an excellent carbon (and methane) sink. The company is confident the science stacks up, but because Rewind hopes to fund the project by selling carbon credits, its process must be vetted by independent experts to ensure it works.

There are several potential pitfalls, the biggest of which is carbon sequestration being difficult to measure. There also is little recourse should something go wrong. “Once you put material in the deep sea, it is almost impossible to get it back again without a huge expense,” said Martin Palmer, a geochemistry professor at the National Oceanography Center in South Hampton, England. “So you need to be 100% confident that the process is safe”

Palmer also notes that although organic matter is better preserved in anoxic environments, it still undergoes degradation that results in some level of methane production. “You would need to be very sure that you would not exceed the methane solubility in the Black Sea waters, or there could be problems,” particularly in an area that is seismically active, Palmer told Grist.

And then there are the logistical challenges, including where to source so much biomass. However, the Black Sea is bordered by six agriculturally productive countries that generate a lot of waste. Much of it is usually burned, or shipped down the Danube and dumped into the sea at depths above the anoxic zone, where it degrades and releases carbon. Given the existing infrastructure for moving all that material, Rewind calculates that the carbon needed to transport it far from shore to dump it at an appropriate depth would amount to no more than 3% of the carbon that could be sequestered. With a volume of more than 131,000 cubic miles, there is plenty of space to do the job.

However, stashing a gigaton of carbon a year will require such large quantities of biomass that it will demand geopolitical coordination. That means convincing politicians, policymakers, and the public. Communicating the idea that his startup isn’t simply dumping waste in the sea — something Amar calls that the “understanding gap” — won’t be easy, especially in such a politically tense region. Rewind remains in the early phases of those discussions with government agencies and officials, but is confident it can sell them on the idea.

“As humanity, we’re a huge intervention to the planet,” he says. “So we’re trying to fix the biggest intervention we’ve made, with a smaller intervention.”

His idea, though perhaps counterintuitive, may not be as crazy as it first sounds.

This article originally appeared in Grist at https://grist.org/article/a-look-inside-the-plan-to-store-carbon-at-the-bottom-of-the-black-sea/.

Grist is a nonprofit, independent media organization dedicated to telling stories of climate solutions and a just future. Learn more at Grist.org

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