ExxonMobil Wins Texas Approval for $5bn Carbon Capture Project

State Regulators Greenlight Plan After Lengthy Battle Over Safety and Subsidies

ExxonMobil has been granted permission to store carbon dioxide emissions in underground wells in Texas following a high-stakes battle with opponents over safety and economic objections.

Regulators in Texas narrowly approved the company’s application in a vote on Tuesday, which paves the way for it to advance a $5bn-plus plan to build the world’s largest carbon capture pipeline network on the US Gulf Coast.

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The permit for the Rose CCS project will enable Exxon to inject about 53mn tonnes of its clients’ CO₂ emissions into three underground wells it has drilled at sites in Jefferson County, about 90 miles east of Houston. Buyers of Exxon’s oil and gas products release about 700mn metric tonnes of CO₂ annually, according to the company.

The company is seeking to connect industrial customers to a 900-mile network of pipelines that can transport CO₂ into porous rock formations deep underground. The strategy reflects the oil group’s broader bet that companies historically associated with producing and selling fossil fuels can also profit from decarbonisation.

Carbon capture and storage is the process of trapping planet-warmingemissions of CO₂ before they reach the atmosphere, compressing the gas andinjecting it deep underground for permanent storage.

While a first wave of facilities in recent decades struggled to make money even with public subsidies, global investment in CCS rose to $6.6bn last year from $4.1bn in 2024. The number of carbon capture plants operating commercially rose by a third to 77, with a further 44 under construction. So far only a small fraction of overall emissions are captured.

Several US oil companies are backing carbon removal projects, including Occidental Petroleum, which plans to operate the world’s largest carbon extraction plant in Texas from 2027. The technology extracts CO₂ directly from the air so it can either be permanently stored or reused.

Representatives on the Railroad Commission of Texas voted two to one in favour of granting Exxon the permit following a public hearing that reflected mounting public and political opposition to CCS in Louisiana and Texas.

Dominic Genetti, Exxon’s senior vice-president of CCS, said approval of the first permit was a “major milestone” and would enable the company to continue expanding its business across the Gulf Coast.

“When you think about the carbon capture and storage itself, plus the industry it can attract, we’re talking many tens of billions of investment,” he said.

Community groups raised concerns about safety issues while some critics slammed CCS technology for relying on tax breaks advanced by former president Joe Biden to make it economic.

“It’s the last thing that ratepayers and taxpayers should be on the hook for,” said Jason Isaac, a former Republican politician and founder of the American Energy Institute, a think-tank.

Wayne Christian, the commissioner who voted against approving the permit, failed in an attempt to delay the vote. He said permitting CCS technology was the most controversial decision to come before the committee over the past decade.

“This is not capitalism, it’s energy socialism. Government picking winners and losers,” said Christian, adding that it was part of the “new green scam” — a reference to the term used by President Donald Trump to deride Biden’s energy policies.

The economics of Exxon’s CCS push depend on climate regulations, carbon tariffs and subsidies once fiercely opposed by much of the oil industry.

EU rules, particularly the bloc’s carbon border adjustment mechanism that penalises carbon-intensive production, are driving investment by US companies seeking to export into the bloc. Trump’s decision not to axe tax credits Biden introduced for CCS has also aided the nascent industry.

However, the Trump administration’s decision on Monday to kill climate rules limiting greenhouse-gas emissions from power plants could dent demand for the technology in the power sector, say analysts.