Fossil fuel barons, tech companies, and even some climate advocates have hailed carbon capture and storage (CCS) as a climate solution. But in the decades since the U.S. began subsidizing it, this technology has only served to give cover to Big Oil and Gas to keep polluting.

Carbon capture promises — and has failed to — fight climate change by capturing carbon dioxide (CO₂) from smokestacks or the air and permanently keeping it out of the atmosphere. It enables a fantasy where dirty energy can be made clean with the right technology; where we can fight climate change while continuing to drill and burn fossil fuels.

Nevertheless, U.S. leaders continue to lavish the industry with lucrative tax incentives. Recently, Trump’s Big Ugly Bill even bolstered 45Q, the main avenue for these incentives. He’s made even more taxpayer funds available to polluters.

Carbon capture won’t save the climate, and neither will 45Q subsidies. In fact, with the way 45Q works, it can pay dirty energy companies to pollute even more. Our newest research shows how the program rewards companies for drilling, burning, and wreaking havoc on our planet. 

Here are four ways 45Q incentives for carbon capture are driving more pollution.

1. 45Q Pays Companies to Create More Toxic Pollution

The 45Q program rewards tax credits to carbon capture projects for every ton of CO₂ they capture and store. This risks creating a perverse incentive for companies to pollute more, just so they can get those credits. 

Take coal, for example. In 2024, coal-fired power plants paid an average of $2.55 per million BTU of coal. Burning that coal would emit CO₂ that, if captured, would be worth $8.14.

In other words, carbon capture projects could buy coal only to burn it, capture just half of the CO₂ emissions, and still make a profit. By incentivizing more fossil fuel extraction, 45Q threatens to drive more pollution.

Notably, carbon capture only addresses one kind of pollutant — CO₂. It does nothing about other climate-wrecking gases like methane. Nor does it rein in other kinds of pollution from fossil fuels. 

By giving climate cover for fossil fuel activities to expand, carbon capture threatens to grow the industry’s other pollutants, such as smog-forming and asthma-worsening nitrogen oxides and carcinogens like benzene.

Incentivizing carbon capture drives more drilling and burning with dubious climate benefits, while communities near fossil fuel operations will face even more dangerous pollution.

2. 45Q Incentivizes More Drilling through Enhanced Oil Recovery

The 45Q program rewards an oil drilling technique under the ridiculous guise that it’s a climate solution. Drillers can claim lucrative tax credits for enhanced oil recovery (EOR): injecting CO₂ into a well to push out the last dregs of oil. 

Notably, the vast majority — 89% in 2022 — of carbon captured in the United States is actually used to drill for more oil through EOR. 

This, of course, is far from “good for the climate”; in fact, we found that burning the oil produced through EOR emits more CO₂ than is injected during the process. Moreover, by one count, in 2022 EOR enabled the drilling of 88.2 million barrels of oil that would have otherwise stayed in the ground.

Nevertheless, with the 45Q provisions passed in the Inflation Reduction Act, companies could receive $60 per ton of CO₂ they used for EOR (compared to $85 for “geological sequestration,” or plain old storage).

With Trump’s Big Ugly Bill, companies can now also get $85 per ton for EOR. This has unlocked a potential $210 billion windfall for oil companies to just drill more. 

3. 45Q Rewards Gas Processing Facilities

45Q also allows gas processing facilities to use a simple relabeling trick to receive tax credits. This has helped to inflate reports of carbon capture’s success. Now, 60% of the CO₂ the EPA reports as “captured” comes from gas processing facilities. 

How has this happened? Many gas wells also contain naturally occurring CO₂. Drilling brings this CO₂ to the surface, along with the methane gas that’s sold and burned for energy. These processing facilities have long separated this CO₂ and other waste from the methane and injected it back underground. 

By relabeling these injection wells, many gas facilities can claim lucrative 45Q tax credits without changing a thing about their dirty operations.

Worse, reinjecting this naturally occurring CO₂ creates the risk that companies start extracting otherwise unprofitable CO₂-rich gas. With 45Q tax credits, they could inject a portion of the CO₂, emit the rest, and still make a profit.

In this way, 45Q threatens to incentivize more CO₂ emissions and gas production than we — or the planet — need, all to capture government subsidies.

4. 45Q Encourage Dirty Climate Boondoggles

The lure of 45Q tax credits has driven the expansion of whole industries of climate scams. That includes so-called “blue hydrogen” — hydrogen produced from natural gas and paired with carbon capture. 

Blue hydrogen is another boondoggle falsely hailed as a climate solution. Besides propping up the gas industry, capturing CO₂ at blue hydrogen facilities does nothing about the massive amounts of climate pollution emitted by the extraction and transportation of natural gas for blue hydrogen. In fact, these upstream emissions almost fully cancel out any emissions reduced via carbon capture.

To make matters worse, the vast majority of U.S. hydrogen is used for oil refining (68%) and harmful nitrogen-based fertilizers (21%). Subsidies supporting blue hydrogen indirectly subsidize Big Oil and Big Ag, too.

45Q is also boosting dirty ethanol; corn ethanol refineries have become one of the most rapid adopters of carbon capture. Touted as a “climate-friendly” gasoline alternative, ethanol is actually terrible for the climate.

Corn grown solely to be turned into fuel has devoured vast tracts of farmland and wreaked havoc on our environment. Accounting for its full lifecycle from seed to tank, ethanol is responsible for almost a quarter more emissions than fossil gasoline.

Tax credits from 45Q threaten to fuel this fire further. Similar to EOR and gas processing, they pay ethanol refineries for something they already do  — capturing their waste CO₂. Meanwhile, there’s no technology to address the climate pollution at every other step of the ethanol cycle.

Rather than help the climate, 45Q is a boon to dirty climate scam technologies, paying them to expand and pollute even more.

Big Oil and Gas Companies Know the Truth — You Should, Too

In press releases and on public stages, fossil fuel companies and utilities are touting their expansion of carbon capture as climate work. 

Behind the headlines, they’re singing a different tune. According to Occidental’s CEO, “If it’s produced in the way that I’m talking about [with carbon capture], there’s no reason not to produce oil and gas forever.” At an oil and gas industry conference, an ExxonMobil lobbyist emphasized that carbon capture was about profit, not the environment.

For these companies, carbon capture and storage is a mirage behind which they continue to drill, burn, pollute, and profit as they always have. The lucrative tax credits of the 45Q program will reward them for even more of the same. 

We can’t let them get away with this. Congress must change course on 45Q. To defend our livable future, our leaders must end carbon capture subsidies, ban the buildout of carbon capture infrastructure, and invest in our 100% renewable future.