News & Analysis
July 25, 2025
A newly operating carbon capture facility in Louisiana that was previously billed as a climate solution by ExxonMobil will now be used to drill for more oil, a partner in the project announced last week.
Exxon said in 2022 that it would transport and permanently store carbon captured from the world’s largest ammonia-producing facility, owned by agriculture fertilizer company CF Industries, in Donaldsonville, Louisiana. But after Congress this month increased tax incentives for companies that use captured carbon to extract more oil from wells, CF Industries said the project would be used for that purpose until it receives permits for “dedicated permanent storage.” President and CEO Tony Will cited the “valuable” tax credits the venture would generate in the announcement.
Climate advocates and policy experts say enhanced oil recovery leads to more fossil fuel production, increasing climate pollution. They fear the boost in tax credits will mean more polluting projects across the country, benefitting oil giants at the expense of taxpayers, as carbon capture ventures have been unprofitable without public subsidies. And they say the public has been misled about the purpose of carbon capture.
