Trusting fossil fuel firms??????

The EU is trusting fossil fuel firms to help clean up the carbon

The realpolitik decision could benefit the planet — and give polluters an excuse to not cut carbon.

BY FEDERICA DI SARIO

Sometimes, only the carbon culprit can catch the carbon.

That’s the EU’s controversial verdict, at least. In a new plan released Tuesday, Brussels confirmed it is banking on some of the world’s biggest emitters to massively invest in new technology to catch carbon and store it for millennia as part of its strategy to hit climate neutrality. New legislation also finalized Tuesday, the Net-Zero Industry Act, will enshrine the request (with some caveats) into law.

There’s an obvious logic to it. Companies like Shell and ExxonMobil have the money, engineering know-how, and facilities needed to quickly grow an embryonic industry that is not profitable — yet — but could help temper a baking planet. 

The strategy “is exactly what the EU needs,” said Eve Tamme, who chairs the Zero Emissions Platform, an organization advising the EU on carbon capture tech.

Yet the decision also grants such firms a potential stay of execution, offering them an EU-approved-but-unproven method to keep emitting carbon for years instead of a blunt mandate to switch to renewable energy ASAP. 

That's put the EU in something of a catch-22. Its own scientific advisers — and even some climate-focused NGOs — concede that carbon capture will be needed to reach the EU goal of climate neutrality by 2050. Power-hungry industries like steel, cement and chemical manufacturing can’t decarbonize easily, and aren’t going away. Carbon capture could help them — and fossil fuel firms can help make that technology real.

For climate-focused politicians, though, that’s a devil’s bargain.

“Ladies and gentlemen, this is a lot of CCS’ing out of the problem by Europe,” proclaimed Bas Eickhout, a Dutch European Parliament member jointly leading the Greens’ EU election campaign, using the wonk’s preferred acronym for “carbon capture and storage.”

Eickhout thereby reminded EU climate chief Wopke Hoekstra, who was seated just a few meters to his right, of Hoekstra’s own words from the COP climate summit: “Don’t CCS your way out of the problem.”

When Hoekstra rose later to respond, he conceded the point: “You cannot magically rely on CCS.” But, he added emphatically, “we also cannot afford to leave CCS out of the equation, particularly for the hardest to abate sectors.”

From kryptonite to acceptance

Carbon capture, at least in theory, is far from new. 

For decades, large corporations have boasted of its CO2-absorbing potential, pitching it as an ideal way to reconcile economic growth and environmental standards without having to rethink how industrial plants operate.

Yet carbon capture can mean many different things, and has never been shown to work on a large scale. It can mean trapping emissions before they’re released, which is more cost-effective. Or it can mean literally removing carbon from the atmosphere, a more untested and pricey approach. 

Once that carbon is caught, a whole network is needed to pack it away: a sophisticated pipeline system, skilled workers, storage sites. 

In the late 2000s, hope in this new technology was soaring — in part because solar and wind power were still expensive — and the EU decided to give it a try. 

In 2009, as part of a recession recovery package, the European Commission launched a €1 billion program to support eight projects in the hope of demonstrating that carbon capture was commercially viable. 

The attempt bombed, as not one of the projects succeeded. Thereafter the technology became kryptonite for policymakers. 

Domien Vangenechten, a carbon capture specialist at climate policy think tank E3G, argued the breakdown was “a failure of the regulatory environment more than of the technology.” Countries were uncertain investors, Vangenechten said, while the EU pricing on carbon pollution plummeted, lowering the financial incentives to catch emissions.

Times have changed, and the idea of applying a giant vacuum cleaner to dirty steel, cement and chemical makers is back in vogue. Even the Intergovernmental Panel on Climate Change, also known as the IPCC, defines carbon capture as one of many ways to keep global temperatures within the threshold of the Paris Accord. 

Europe, too, is growing more anxious about losing local industries as China and the U.S. pump money into their own manufacturing. 

So to make carbon capture a reality, the EU has decided it must have fossil fuel companies lead the way, investing part of their hefty profits into its development. 

The EU’s plan, released Tuesday, estimates that the EU will have to capture 280 million tons of CO2 by 2040 and around 450 million tons by 2050 — a far cry from the minimal capacity today.

However, it steers clear of setting clear targets on issues like how many carbon trapping facilities Europe needs, and focuses instead on the need to develop the entire network from capture to storage. 

Vangenechten called the approach “much smarter than just, say, ‘Here is a billion euros for five CCS projects.’”

New monopoly or low-profit business?

But there are economic and climate risks attached to trusting the oil and gas sector to provide the seed funding for a new industry that could someday generate billions. 

For one, it puts them first in line to capture a monopoly. 

“The last thing we want is that the oil and gas sector gets a new big revenue stream for them to solve the emissions that they caused in the first place,” E3G’s Vangenechten said.

The fear arose when Brussels inserted a clause in its Net-Zero Industry Act — a bill to turbocharge green industry — requiring oil and gas firms to contribute to a plan to build 50 million tons of CO2 storage by 2030.

Denmark and the Netherlands pushed back, arguing the text would block out more climate-friendly competitors not endowed with fossil fuel cash. Notably, the two countries are essentially the only places in the EU where such competitors exist on a larger scale.

EU negotiators eventually wrote in a finely tuned opt-out to appease the pair, but left in the broader carbon capture mandate for oil and gas firms. 

To stave off a fossil fuel monopoly, policymakers should see carbon capture as a public good, argued Lina Strandvåg Nagell, a senior manager at Bellona, an NGO focused on how to decarbonize industry. 

A priority should be placed on capturing carbon at places like steel, cement and chemical manufacturing plants, which can't easily switch to renewable alternatives.

"We are not doing this for the oil and gas industry to make money or make a buck based on public money," said Strandvåg Nagell, who is from Norway — a country that has invested €1.8 billion in taxpayer money into a carbon capture project, hoping to show its commercial viability. Notably, bold fossil fuel names like Equinor, TotalEnergies and Shell are involved. 

In an interview with POLITICO, however, Norwegian Energy Minister Terje Aasland said that moving forward, companies can’t rely on public funding for their carbon capture and storage projects — there needs to be a profit model.

That may not happen for a while, begging the question of whether fossil fuel companies will actually be willing to make the investments the EU is banking on. 

The industry is used to "high risk, high return,” said Eadbhard Pernot, who leads work on carbon capture for Clean Air Task Force, an NGO. And carbon capture, for now, is "high risk, low return,” he added. 

"At least for the time being, companies are going to be barely breaking even,” he said, “and certainly won't have the same returns that they [are] used to in the exploration and production of oil and gas.”

To green politicians, it’s a reason to avoid the carbon capture lure.

“This is a very expensive technology,” German Green MEP Michael Bloss said Tuesday, “and is a good thing for the gas and coal companies.”