The world’s largest fossil fuel and cement companies should shoulder a major share of the investment needed to develop carbon removal technologies, according to a new peer-reviewed study in Climate Policy.

The research, co-authored by Climate Analytics, distributes the costs of bringing direct air carbon capture and storage (DACCS) to commercial scale. It determines that the 66 highest-emitting fossil fuel companies are collectively responsible for between USD 40.5 and 77.6 billion of the investments required from now until 2070, out of a total of about USD 250 billion globally.

“Based on climate justice principles, the companies that contributed most to the climate crisis should also be responsible for investing in solutions,” said lead author Dalia Kellou. “This includes funding the early-stage investments needed to make carbon removal technologies viable.”

Why DACCS matters

To reach global net-zero CO2 emissions by 2050 and greenhouse gas emissions by the 2070s, the Intergovernmental Panel on Climate Change (IPCC) is clear that after deep emissions cuts, we will still need to permanently remove carbon dioxide from the atmosphere. The study authors stress that investments in DACCS must be in addition to rapid and stringent emissions cuts consistent with the Paris Agreement.

“Carbon removal technologies cannot replace the urgent need to phase out fossil fuels,” said Kellou. “But they will be essential for balancing out residual emissions in the near- and mid-term and to draw temperatures back down in the long-term. Who better to fund this than those most responsible for the problem?”

Conventional carbon removal techniques, such as land-based carbon sinks like forests and soils, do not store carbon permanently, the uncertainties are large, and there is insufficient land available to sustainably remove excess carbon dioxide. One effect of global warming already being observed is damage to global carbon “sinks”, which may ultimately lead to their collapse.

New technologies like DACCS, which can permanently remove carbon, will be necessary to withdraw the amount of carbon dioxide required to get to net zero. Unfortunately, today’s technologies are prohibitively expensive, costing hundreds of dollars per tonne of CO2 removed and most are not ready to be deployed at scale.

The study estimates that an initial USD 32 billion is required to move DACCS beyond its “formative phase” by 2040, where costs are high and deployment is minimal. Scaling the technology to achieve costs of around USD 100 per tonne of CO2 — a level that makes it competitive with other mitigation options — will require a total investment of about USD 250 billion.

Who pays?

Using the “polluter pays” principle, the study’s authors allocate responsibility across investor-owned fossil fuel companies according to their historic and projected emissions. The top 10 emitters would bear just over half of the initial costs.

For the formative phase alone, this would mean:

ExxonMobil: USD 2.8 billion
Shell: USD 2.5 billion
BP: USD 2.2 billion
Chevron: USD 1.9 billion
Peabody Energy: USD 1.8 billion

“These companies are making billions in surplus profits” said Kellou, “It is both fair and feasible that a portion of their windfall is used to fund technologies that will help clean up the damage they have caused.”

If the world follows a net zero CO2 by 2050 pathway, the investment required by these companies would amount to USD 41 billion. If the carbon majors fail to adopt robust decarbonisation strategies, their collective investment responsibility would nearly double.

The study is part of a special issue on Carbon Removal Policies and Ethics organised by the CDR-PoEt consortium.

Read the study

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Fossil fuel giants should pay their share to scale up carbon removal technology, study finds