https://priceofoil.org/2024/08/27/funding-failure-carbon-capture-and-fos...
“Funding Failure: Carbon Capture and Fossil Hydrogen Subsidies Exposed,” reveals how governments in North America and Europe are preparing to waste hundreds of billions of taxpayer dollars on these ineffective technologies, further benefiting the fossil fuel industry, despite their record profits.
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. Carbon capture and hydrogen subsidies prolong the fossil fuel industry, boosting corporate profits and reversing progress on shifting public finance for dirty energy to pay for a just energy transition. Although carbon capture projects are failing, they are being used to justify fossil fuel expansion diverting investment from existing and effective alternatives like renewables, energy storage, and energy efficiency.
Governments must eliminate subsidies and public finance for fossil fuel extraction and infrastructure, including carbon capture and fossil hydrogen, by 2025. They should implement tax policies that disincentivize new fossil fuel investments and maximize public funds for a just transition and climate impacts. Additionally, governments must fulfill their global climate finance commitments and support a new, ambitious cross-cutting climate finance goal, with rich countries paying their fair share on fair terms to avoid worsening the most widespread debt crisis in history. Prioritizing public finance for communities most in need and key infrastructure for a just energy transition is essential.
Key Findings
- USD 30 billion of public money handouts for carbon capture and fossil hydrogen to date.
- Five governments account for 95% of this spending:
- United States: USD 12 billion
- Norway: USD 6 billion
- Canada: USD 3.8 billion
- European Union: USD 3.6 billion
- Netherlands: USD 2.6 billion
- In addition, the 45Q tax credit is estimated to have cost the US taxpayer USD 1.3 billion up to the end of 2022. A figure that could grow to over $100 billion in the coming decade due to increases made in the Inflation Reduction Act (IRA).
- Enhanced Oil Recovery: USD 4 billion has been spent by the United States and Canada subsidizing carbon capture for enhanced oil recovery (EOR), effectively using public money to subsidize oil production.
- These fossil fuel handouts are set to increase. Our Policy Tracker, which covers global government policies announced since 2020 that financially support carbon capture and hydrogen, show that public spending on carbon capture and hydrogen could grow to between USD 115 billion and USD 240 billion in the coming decades.
- Exxon shifted from carbon capture skeptic to vocal supporter, following successful lobbying efforts to secure billions in subsidies. Exxon now projects trillions in revenue from these technologies, at the expense of taxpayer dollars.
