ExxonMobil Corp. says the time has come to turn capturing carbon emissions into a real business, as it faces pressure from activists to become a greener company.
That represents an about-face for the oil giant, which for years has held a pessimistic view of investing heavily to commercialize carbon-capture projects, saying they made little economic sense without massive government incentives.
ExxonMobil, which is counting on carbon capture and storage as a primary way to achieve its targets for reducing greenhouse gas emissions, touted the recent creation of a new business unit to commercialize the technology during its annual analysts day today, saying political changes and other advances were combining to make it more viable, The Wall Street Journal reports.
“We’ve made enough progress where we are bringing some of the technology to the field now,” Chief Executive Darren Woods says. “Couple that with governments around the world putting policies in place, investment interest in the space—all of this is coming together.”
ExxonMobil said at a recent meeting that carbon capture will be a $2 trillion market by 2040 and that it is the cheapest way to address emissions, citing a current U.S. tax credit of as much as $50 per metric ton of captured carbon as less expensive than incentives to promote electric vehicles.
ExxonMobil pledged last month to invest $3 billion in its new low-carbon unit through 2025, saying it has 20 projects in the pipeline. Some of the projects Exxon highlighted have been under consideration for years, according to current and former employees, and weren’t previously greenlighted because they were deemed commercially unviable.
For example, managers raised cost concerns about a project to capture carbon from Exxon petrochemical plants along the Gulf coast and inject it into underwater rock formations, the people said.
An Exxon spokesperson says costs are an issue in project evaluations but financial considerations are changing as demand, government policies and technologies evolve. Exxon’s new view comes after it posted a loss of $22 billion last year, its first annual loss in modern history, and is facing pressure from an activist investor and others to step up its low-carbon investments. Read the full story.