Climate Insider Brief:
- Top Spenders on Ineffective Technologies: The U.S., Norway, and Canada are the leading nations in taxpayer spending on carbon capture and fossil-based hydrogen technologies, despite decades of evidence showing these approaches have failed to significantly reduce emissions.
- Carbon Capture’s Original Purpose: Originally developed to enhance oil production in the 1970s, carbon capture has continued to serve the fossil fuel industry, with projects often failing to deliver meaningful climate benefits.
- Fossil Fuel Industry Influence: Companies like ExxonMobil have shifted to promoting carbon capture, securing billions in government subsidies, while critics argue these investments delay the transition to renewable energy and represent a “fossil fuel bailout.”
A new report from the research and advocacy group Oil Change International (OCI) has spotlighted the United States, Norway, and Canada as the top spenders of taxpayer money on climate “solutions” that have repeatedly failed to deliver results. These wealthy nations are pouring billions into carbon capture and fossil-based hydrogen subsidies, technologies that have done little to reduce carbon emissions despite decades of research and development.
The report, titled Funding Failure, reveals that these governments have been propping up carbon capture technology for over 50 years without making significant progress in addressing the climate crisis. Carbon capture projects, which aim to compress and store carbon dioxide underground, have shown minimal effectiveness in reducing emissions. Despite this, five countries—led by the U.S.—account for 95% of all global carbon capture spending.
Billions Spent, Little Impact
According to the report, the U.S. has invested over $12 billion in carbon capture projects over the last 40 years, making it the leading country in public spending on these technologies. Norway follows with $6 billion, and Canada has spent $3.8 billion. The European Union and the Netherlands are not far behind, with expenditures of $3.6 billion and $2.6 billion, respectively.
Critics argue that this funding is misplaced. Harjeet Singh, global engagement director for the Fossil Fuel Non-Proliferation Treaty Initiative, said the subsidies represent a “colossal waste of money.” He added, “It is nothing short of a travesty that funds meant to combat climate change are instead bolstering the very industries driving it.”
Technology Initially Designed for Oil Production
While carbon capture is often touted as a solution to reduce planet-heating emissions, the OCI report highlights that it was initially developed in the 1970s to enhance oil production—a role it continues to play today. The technology has “barely” contributed to emissions reduction, according to OCI, and has often been used to extend the life of oil fields through enhanced oil recovery.
High-profile failures of carbon capture projects in the U.S. serve as further evidence of the technology’s shortcomings. The Petra Nova project in Houston, Texas, for example, cost nearly $200 million in taxpayer money, yet the captured emissions were later used for crude oil production. Another project, FutureGen, received $200 million but never materialized.
Fossil Fuel Industry’s Lobbying Efforts
The report also exposes how fossil fuel giants like ExxonMobil have become outspoken proponents of carbon capture, a technology they once criticized. Exxon now claims that carbon capture and hydrogen could help its Low Carbon Business Unit generate “hundreds of billions of dollars” and grow larger than its core oil business. The company has successfully lobbied the U.S. government for direct funding, securing $12 billion in the 2021 Bipartisan Infrastructure Bill for carbon management research and pushing for increased 45Q tax credits under the Inflation Reduction Act (IRA).
The IRA raised the value of the 45Q tax credit from $35 to $60 per ton of carbon dioxide stored, a change that could cost taxpayers over $100 billion in the next decade.
A “Fossil Fuel Bailout”
OCI argues that continued investment in carbon capture and fossil hydrogen delays the transition to renewable energy. In a social media post, the group stated, “We need real climate action, not fossil fuel bailouts!”
The report concludes that public spending on these ineffective technologies could balloon to between $115 billion and $240 billion in the coming decades, all while benefiting the fossil fuel industry. As Singh put it, “Funds meant to combat climate change are instead reinforcing the very system driving the crisis.”
Implications for Climate Policy
As the U.S., Norway, and Canada continue to allocate billions toward carbon capture and fossil hydrogen, questions arise about the long-term viability of these strategies. Will these nations pivot toward renewable energy sources, or will they remain tied to technologies that primarily serve to prolong the life of the fossil fuel industry? The answer could determine the course of global climate efforts for years to come.
SOURCE: Corporate Knights
Featured Image: Credit: Corporate Knights
