Can Exxon Build the World’s Biggest Carbon Capture Business?

The oil giant has started its first commercial carbon capture project, committed $20 billion through 2030, and set its sights on 100 million tonnes of annual storage capacity. The engineering may be the easy part.

The pipes began moving carbon dioxide in July 2025. In Donaldsonville, Louisiana — a town more associated with fertiliser plants than climate ambitions — ExxonMobil quietly activated the first commercial operation of what it intends to become the largest carbon capture and storage (CCS) business ever assembled. The customer was CF Industries, a nitrogen producer looking to cut its emissions by up to 50 percent at a single site. The scale, for now, is modest. The implications are not.

What ExxonMobil is attempting along the U.S. Gulf Coast is something no oil company has tried at this magnitude: converting decades of pipeline, geology, and subsurface engineering expertise into a revenue-generating service business — one that gets paid to dispose of other industries’ carbon dioxide. The ambition is enormous. The obstacles are equally so.

The Macro Backdrop: Why Carbon Capture Is Having Its Moment

Carbon capture and storage has been a fixture of climate policy discussions since the 1970s, perpetually promising more than it delivered. That began to change when the U.S. Inflation Reduction Act of 2022 restructured the economics of the industry with its 45Q tax credit — offering $85 per tonne for CO2 directly air-captured and $60 per tonne for point-source capture. Suddenly, projects that had struggled to close financing found the numbers working. Mordor Intelligence

The IEA now estimates that operational capture capacity worldwide could reach 430 million tonnes by 2030, with over 474 projects announced globally targeting 812 million tonnes per annum of capacity — a figure that would have seemed fantastical five years ago. The global CCS market, valued at roughly $7.85 billion in 2025, is forecast to more than double to $22.69 billion by 2035, expanding at a compound annual growth rate exceeding 11 percent. Persistence Market ResearchResearch Nester

ExxonMobil is betting it can claim the commanding position in that market before the competition arrives.

1: The ExxonMobil Carbon Capture Business — What It Actually Is

The term “carbon capture business” can sound vaguely abstract. What ExxonMobil is constructing is concrete, literal, and industrial: a network of CO2 pipelines, injection wells, and geologic storage sites stretching across Texas, Louisiana, and Mississippi, operated as a third-party service that heavy emitters — steel mills, ammonia plants, gas processors — pay to access.

The company claims to have cumulatively captured more CO2 than any other corporation — 120 million metric tons — accounting for approximately 40 percent of all anthropogenic CO2 ever commercially captured. That history of operating CO2 pipelines, built originally for enhanced oil recovery rather than climate remediation, is now being redeployed for a different purpose. ExxonMobil

The first commercial CCS operation with CF Industries went live in mid-2025. Three more projects are scheduled to activate in 2026: a natural gas gathering facility in Louisiana called NG3, and industrial partnerships with Linde and Nucor. ExxonMobil is also targeting a final investment decision on its first Low Carbon Data Center by late 2026 — a project that would pair natural gas power generation with carbon capture to supply data centres with low-carbon electricity. ExxonMobil

The target ExxonMobil has set itself is 30 million tonnes per annum (MTA) of CCS capacity under contract by 2030. It currently has roughly 9 MTA signed with third parties. The company estimates that its U.S. Gulf Coast network can ultimately remove up to 100 MTA of captured CO2 — more than seven times what it has committed to so far. That 100 MTA figure, if ever realised, would make the Gulf Coast hub the largest single carbon disposal system in human history. ExxonMobil

To get there, ExxonMobil is pursuing up to $30 billion in lower-emission investments from 2025 through 2030, with approximately 65 percent directed toward reducing the emissions of other companies — a telling reorientation of capital toward a service business model rather than commodity production. ExxonMobil

2: Why ExxonMobil’s Carbon Capture Strategy Is More Than Climate Theatre

Is ExxonMobil’s carbon capture target realistic by 2030?

ExxonMobil’s 30 MTA target for 2030 is ambitious but not implausible. The company currently holds approximately 9 MTA under contract with third-party customers, has operationalised its first commercial project, and has three more starting in 2026. Reaching 30 MTA would require roughly tripling contracted volumes over four years — achievable if policy support remains intact and permitting timelines hold.

What makes ExxonMobil’s positioning distinct from a conventional oil major diversification story is the structural logic underlying it. Heavy industry — cement, steel, chemicals, fertilisers — produces roughly a third of global CO2 emissions. Electrification alone cannot decarbonise these sectors at scale; the process heat and chemical reactions involved produce CO2 as an unavoidable byproduct. The IEA estimates that CCUS could contribute to 25 percent of emissions reductions in iron and steel, 63 percent in cement, and over 80 percent in fuel transformation by 2050. BCC Research

That leaves heavy industry facing a structural need for a disposal service — precisely what ExxonMobil is now selling.

The data centre angle adds another dimension. AI-driven computing demand has sent power consumption soaring, and hyperscalers are increasingly desperate for low-carbon electricity sources that renewables alone cannot reliably supply at scale. An integrated system pairing natural gas generation with CCS — what ExxonMobil calls its Low Carbon Data Center concept — addresses that need in a way that does not require grid-scale battery storage or new transmission infrastructure. It’s an elegant proposition, if the economics close.

The picture is more complicated when you look at the cost structure. Capture costs for high-purity industrial CO2 streams, such as natural gas processing, run approximately $15 to $25 per tonne in North America. That’s manageable — often below the 45Q credit value. But for dilute streams from power and cement plants, costs escalate sharply. The U.S. Department of Energy has set a target of lowering carbon capture costs to under $40 per tonne by 2025 and $30 per tonne by 2035 — goals that represent genuine engineering progress but have not yet been universally met in commercial deployment. Coherent Market InsightsBCC Research

ExxonMobil’s competitive moat, at least for now, rests on infrastructure. It already owns the largest CO2 pipeline network in the United States. Building that from scratch would cost multiples of what it costs to expand the existing system. New entrants face not just capital barriers but years of permitting, right-of-way negotiations, and regulatory approvals for Class VI injection wells — the EPA-regulated deep wells required for permanent CO2 storage.

3: The Implications — Markets, Policy, and the Shape of a New Industry

If ExxonMobil succeeds, the consequences ripple far beyond its own balance sheet.

For heavy industrial companies — the steelmakers, fertiliser producers, and petrochemical firms that have quietly struggled to articulate credible decarbonisation strategies — a commercially available, third-party CCS service changes the calculus. Rather than owning and operating capture infrastructure themselves, they can treat CO2 disposal as an operating cost, analogous to waste management. Louisiana alone has already seen approximately $61 billion invested into new emissions reduction projects, with CCS serving as the anchor technology attracting industrial relocations. ExxonMobil

That investment dynamic has regional implications. States with favourable geology — deep saline aquifers, depleted reservoirs, existing pipeline corridors — stand to become hubs for low-carbon industrial activity, much as port access shaped industrial geography in the 19th century. The U.S. Gulf Coast, Texas, and the North Sea already hold significant advantages.

For financial markets, the emergence of a CCS service revenue stream raises a question that hasn’t been asked before: how do you value it? ExxonMobil’s own projections suggest its new low-carbon businesses could reach $13 billion in earnings by 2040 as lower-emissions markets mature. That’s a number large enough to move the needle on a company of Exxon’s scale — but only if contracted volumes, tax credits, and carbon markets all develop as anticipated. Each variable carries meaningful uncertainty. ExxonMobil

The policy dependency is where the picture gets sharply conditional. The 45Q credit is the economic backbone of U.S. CCS economics. Any legislative modification — a reduction in credit value, a tightening of eligibility criteria, or simple regulatory delay in well permitting — restructures project economics overnight. ExxonMobil has been explicit that further expansion beyond 2030 hinges on supportive regulation, timely permitting, and broader market formation — language that is technically accurate and simultaneously a signal that the 100 MTA aspiration is contingent, not committed. spglobal

The data centre bet deserves particular attention. If the final investment decision expected in late 2026 leads to construction, it would mark the first time an oil major has entered the power-and-compute market as a principal, not a fuel supplier. That’s either visionary or a distraction, depending on whether AI demand growth continues to outpace low-carbon power supply — a question the entire energy industry is grappling with simultaneously.

4: The Counterargument — Scale, Credibility, and the Climate Accounting Problem

Not everyone finds ExxonMobil’s carbon capture ambitions convincing.

The IEA itself, before moderating its language, published analysis accusing the fossil fuel industry of maintaining “an illusion that implausibly large amounts of carbon capture are the solution.” The agency’s point wasn’t that CCS is worthless — it’s that using CCS to justify continued oil and gas expansion conflates two separate questions: whether CCS can help decarbonise hard-to-abate industries (it can) and whether it justifies not accelerating the energy transition (it doesn’t).

A scientific review of ExxonMobil’s 2025 climate report found that the company misrepresents conclusions from both the IPCC and IEA by denying the importance of a fossil fuel phaseout and instead framing CCS as the essential solution to climate targets — a framing the review notes is inconsistent with the actual recommendations of both institutions. Union of Concerned Scientists

The IPCC’s 2023 Synthesis Report acknowledges pathways that include CCS but stipulates that all such pathways also require steep and immediate emissions reductions. ExxonMobil’s corporate narrative, critics argue, uses the legitimate role of CCS to defer the harder structural question — whether the business model of a company producing and selling fossil fuels at record volumes is compatible with 1.5°C targets, regardless of how much CO2 it buries.

CEO Darren Woods has pushed back with characteristic directness. His argument — that EV sceptics were once told the same thing about implausible scale, and that “there is no solution set out there today that is at the scale to solve the problem” — is not entirely wrong. Scale takes time. But the parallel is imperfect: solar and wind costs declined by 90 percent over a decade of deployment; CCS costs have proven stickier and more dependent on policy than on learning curves.

There’s also the Scope 3 omission. ExxonMobil’s net-zero commitments cover Scope 1 and Scope 2 emissions from its own operations. They do not extend to the CO2 released when its customers burn the oil and gas it sells — which accounts for the overwhelming majority of the company’s climate footprint. Burying a few hundred million tonnes of industrial CO2 while producing billions of barrels of oil is arithmetically coherent but climatically insufficient by any serious net-zero accounting.

Closing: A Bet Worth Watching

ExxonMobil is not pretending to be a renewable energy company. Its Low Carbon Solutions strategy is explicitly a service business grafted onto a hydrocarbons core — a bet that the world will need to remove CO2 from heavy industry long before it stops burning fossil fuels, and that the company with the infrastructure, geological knowledge, and financial durability to build a capture network at scale will command pricing power in a market that barely exists today.

That bet may well prove correct. The 45Q credit structure, the intractable emissions profile of steel and cement and chemicals, and the sheer inertia of the global energy system all support a future in which someone has to manage industrial carbon at scale. ExxonMobil has the pipes, the wells, the geology, and the balance sheet to be that someone.

Yet “realistic” and “sufficient” are different standards. The world’s largest carbon capture business, if ExxonMobil builds it, will still capture a fraction of the emissions the company’s products release when burned. The Gulf Coast network is a genuine industrial innovation. It is not a climate strategy.

What it is, perhaps most accurately, is a preview of the climate economy the world is likely to get — not the one its models prescribed.