The carbon cycle is a naturally occurring process linking the atmosphere, biosphere, soils, rocks, and oceans. Human activity has severely disrupted this balance. Industries like mining, oil and gas, energy production, shipping, and industrial farming have accelerated the release of CO2 into the atmosphere far beyond natural rates.
While it is easy to criticize oil majors for their role in climate change, many of these companies are now uniquely positioned to help fix the problem. With increasing momentum around carbon capture technology, the sector is rapidly emerging as a key climate solution and a growing investment theme. However, critics argue that oil majors' involvement in CCS can sometimes be used to justify ongoing fossil fuel extraction (e.g., enhanced oil recovery).
#What Is Carbon Capture?
Since the industrial age began in 1750, human activity has steadily increased CO2 levels in the atmosphere. Today, CO2 concentrations are the highest they have been in at least 650,000 years and possibly the past 20 million years. This rise is driving global warming, disrupting ecosystems, and threatening biodiversity.
Carbon capture is one promising response. It involves removing CO2 from exhaust streams or directly from the air and storing it permanently underground, often in depleted oil and gas fields. This process is known as sequestration. While effective, it is currently expensive and technically demanding.
#Carbon Capture and the Paris Agreement
The Paris Agreement aims to limit global warming to 1.5°C. According to the Intergovernmental Panel on Climate Change (IPCC), to stay on track, we must remove between 7 and 9 gigatonnes (Gt) of CO2 from the atmosphere annually by 2050. Carbon capture, utilization, and storage (CCUS) is one of the few technologies that can help meet that target.
However, current global CCS capacity is under 50 million tonnes annually, a fraction of the 7–9 gigatonnes needed. Bridging this gap will require exponential scaling, major investments, and favorable policy.
#Direct Air Capture and Filtering Tech
Direct Air Capture (DAC) extracts CO2 straight from the air. Companies using this approach include:
Occidental Petroleum (NYSE: OXY) is advancing carbon capture and climate tech through subsidiaries and investments in Direct Air Capture, sustainable fuels, and carbon-based products, aiming for large-scale emissions reduction and net-zero goals by leveraging decades of expertise in carbon storage and innovative partnerships.
Skytree (Netherlands): Develops decentralized DAC systems for industries like agriculture and indoor air quality. Their technology captures CO₂ onsite, offering a sustainable carbon dioxide source.
Soletair Power (Finland): Integrates DAC into building HVAC systems, enabling structures to capture CO₂ from ambient air. They've partnered with companies to utilize captured CO₂ in products like concrete.
Climeworks AG (Switzerland): Operates several DAC plants, including 'Mammoth' in Iceland, which captures CO₂ and stores it underground through mineralization. Their technology uses renewable energy to power the capture process.
Oak Ridge National Laboratory (US): Conducts research on DAC technologies, including the development of energy-efficient materials for CO₂ capture. They've licensed some of their DAC innovations to startups for commercialization.
Zero Carbon Systems develops and deploys Direct Air Capture (DAC) technology to remove carbon dioxide from the atmosphere. Its system is designed to be highly scalable, low cost, and energy efficient, with innovations that enable high throughput, lower energy use, and heat recovery.
Center for Negative Carbon Emissions (Arizona State University): Develops 'Mechanical Trees™' that passively capture CO₂ from the air, offering a scalable DAC solution.
National Energy Technology Laboratory (US): Explores various carbon dioxide removal approaches, including DAC, to achieve gigaton-scale CO₂ removal by 2050.
Many direct air capture (DAC) systems use chemical or resin-based filters to absorb CO₂. Companies like Global Thermostat use large fans to draw air through contactors filled with chemical sorbents. The Center for Negative Carbon Emissions at Arizona State University has developed 'Mechanical Trees™' that passively capture CO₂ using a moisture swing process, rather than specialist membranes. The National Energy Technology Laboratory is exploring a range of carbon removal technologies, including DAC, with the goal of achieving gigaton-scale CO₂ removal by 2050.
#Oil Majors Deepen Carbon Capture Commitments
Maersk Drilling is actively participating in Denmark's Project Greensand, which aims to repurpose depleted oil and gas fields in the North Sea for carbon dioxide storage. The initiative plans to store up to 500,000 tonnes of CO₂ by 2025, with ambitions to scale up to 3.5 million tonnes annually by 2030.
Occidental's subsidiary, 1PointFive, is constructing the Stratos facility in Texas, designed to capture up to 500,000 tonnes of CO₂ per year starting in 2025. The company has secured permits for CO₂ sequestration and has entered into agreements to store millions of tonnes of CO₂ annually at its Pelican Sequestration Hub in Louisiana.
ExxonMobil has committed up to $30 billion between 2025 and 2030 toward lower-emission initiatives, including carbon capture and storage (CCS). The company is developing a comprehensive CCS network along the U.S. Gulf Coast, having acquired over 271,000 acres in Texas state waters for subsurface CO₂ storage, marking the largest offshore storage site in the U.S.
BP has revised its low-carbon investment plans, reducing annual spending on hydrogen and CCS projects from $4 billion to $800 million through 2027. This strategic shift reflects a focus on fewer, high-return projects within its low-carbon portfolio.
China continues to invest in large-scale ecosystem restoration projects, including reforestation and wetland rehabilitation, to enhance its carbon sinks. These efforts are integral to the country's strategy to achieve carbon neutrality by 2060.
Adoption varies widely across regions. While countries like China are ramping up CCS deployment, many developing nations face hurdles including infrastructure gaps, financing challenges, and unclear regulations.
#Recycling CO₂: Limited Upside, Lingering Emissions
Some advocates propose reusing captured CO2 to boost crop yields or create synthetic fuels. While attractive in theory, burning recycled CO2 still releases emissions. These methods may reduce net new emissions compared to fossil fuels, but they do not result in permanent carbon removal. For true climate benefit, long-term storage or mineralization is needed.
Other ideas include using crushed olivine on beaches to trigger natural mineral reactions. Project Vesta is testing this approach in the Caribbean.
Bioenergy with carbon capture and storage (BECCS) offers another path to negative emissions. It involves burning biomass and storing the resulting CO2. Yet scalability remains a concern.
Not all carbon capture projects are welcome. Some face resistance over land use, potential leakage, or fears of greenwashing. Equitable project design and transparent stakeholder engagement will be key to long-term success.
#Simple Solutions, Complex Scaling
Reforestation and regenerative agriculture can absorb CO2 but are hard to scale without industrial intervention, which may undermine their benefits. None of the current solutions are perfect or cheap, but innovation is accelerating.
#Elon Musk and the XPRIZE
In 2021, Elon Musk announced a $100 million prize for the best carbon capture technology, administered by the XPRIZE Foundation. Musk has suggested CO2 could be turned into rocket fuel, aligning with his plans for Mars. Tesla already profits from carbon credits and could benefit from carbon capture breakthroughs.
Other backers of carbon removal include Microsoft, which pledged $1 billion for carbon reduction in 2020, and Virgin Earth, which offered a $25 million prize as early as 2007.
#Blue and Green Hydrogen
Hydrogen fuel cells are gaining traction, but current production relies heavily on fossil fuels. Grey hydrogen, made from natural gas, accounts for 95% of today’s hydrogen output.
Blue hydrogen uses CCS to reduce emissions from grey hydrogen. Equinor is building a major blue hydrogen plant in northern England.
Green hydrogen is created from renewable energy via electrolysis and has no emissions, but it remains expensive.
Costs are falling, and companies like Nikola are pushing hydrogen-powered transport. As electrolysis equipment becomes cheaper, particularly in China, green hydrogen may scale faster.
#Public Market Momentum
Investor interest in CCS is rising. Aker Carbon Capture, PowerTap Hydrogen, Plug Power, ITM Power, and Ceres Power have all seen notable investor interest.
Massive tailwinds are accelerating CCS and DAC adoption. The U.S. Inflation Reduction Act (IRA) offers up to $180 per tonne for CO₂ captured through DAC and permanently stored, creating a major financial incentive for developers and investors. Europe is also pushing forward. The EU Net Zero Industry Act includes carbon removal targets and supports industrial CCS hubs to help meet its climate goals.
Demand for high-quality carbon removal credits is rising. Firms are shifting from avoidance offsets to durable removals, funding startups like Charm Industrial and Heirloom. This trend is driving capital into early-stage CCS and DAC ventures.
As renewables become cheaper and global regulations tighten, carbon capture could move from niche to necessary. The sector is still early-stage but offers multiple avenues for innovation, impact, and returns. As the climate clock ticks, carbon capture is shifting from theory to action.