Businesses seeking to lead on sustainability and meet net-zero commitments should focus on decarbonizing their Scope 3 emissions, which include emissions from fossil fuel, steel, and fertilizer companies with hard-to-reduce emissions. These businesses, along with their big customers, are turning to carbon capture, removal, and storage technologies as a potential solution. However, watchdog groups argue that investing in these technologies will only prolong the reliance on industries with heavy environmental footprints instead of phasing them out.
The carbon capture and removal sector has recently received a boost from the Inflation Reduction Act of 2022, which extends and expands tax credits for businesses that sequester carbon dioxide. Companies are responding with new investments and advancements in carbon capture technologies. For example, JP Morgan Chase signed a $200 million deal with Climeworks, a startup that pulls carbon directly from the atmosphere and stores it underground. The US Department of Energy also invested $251 million in large scale carbon storage and transport projects.
Carbon capture, removal, and storage technologies offer potential solutions for decarbonizing hard-to-abate industries. Carbon capture focuses on stopping emissions from a single industrial process, while carbon removal addresses historical emissions by pulling carbon dioxide directly from the atmosphere. Carbon storage provides a place to store the captured and removed carbon dioxide by building pipelines and injecting it into wells.
While carbon capture may quickly decarbonize high-emitting industries, it also funnels more money into oil and gas companies, which can be problematic for the green economy. Critics argue that the technologies are expensive and don’t encourage sustainable development. However, many models in the Intergovernmental Panel on Climate Change’s recent report rely on carbon capture to achieve significant emissions reductions.
There are concerns about the cost and feasibility of carbon capture technologies. Retrofitting manufacturing facilities, drilling new wells, and laying pipelines require significant infrastructure and capital investments. Some advocates argue that resources should be directed towards other technologies that can create a full transition to clean, renewable energy.
However, proponents of carbon capture argue that it offers a concrete and immediate decrease in carbon emissions from high-emitting industries. They see it as a transition technology that can be scaled up quickly while the rest of the economy undergoes a shift towards renewable energy.
The future of point source carbon capture hinges on the success of the green transition and whether it can deliver on its promises. Some see it as a necessary tool for reducing emissions in the short term, while others believe that resources should be directed towards alternative technologies.