IEA: Big Oil’s carbon capture strategy alone won’t solve climate change

Global oil and gas producers need to abandon the “illusion that implausibly large amounts of carbon capture” will help solve climate change, and must instead scale up investments in clean energy, according to International Energy Agency’s latest report released ahead of the COP28 climate summit in Dubai.

The report, which reviewed the oil and gas industry’s role in reaching net zero carbon emissions by 2050, warned that carbon capture – currently the linchpin of many firms’ transition strategies – can’t be used to maintain the status quo.

“The oil and gas industry invested around $20 billion in clean energy in 2022, or roughly 2.5% of its total capital spending,” the IEA noted. “The report finds that producers looking to align with the aims of the Paris Agreement would need to put 50% of their capital expenditures towards clean energy projects by 2030, on top of the investment required to reduce emissions from their own operations.”

The industry has been a marginal force in transitioning to a clean energy system, the IEA said. “Oil and gas companies currently account for just 1% of clean energy investment globally – and 60% of that comes from just four companies.”

“The fossil fuel sector must make tough decisions now,” said IEA Executive Director Fatih Birol. “The journey to net zero emissions will be harder to navigate if the sector is not on board.”

U.S. oil majors such as Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) have been investing billions in carbon capture technology, while European counterparts Shell (NYSE:SHEL) and BP (NYSE:BP) have taken a contrasting approach to renewable energy.