How the 2024 U.S. Election Could Shape the Future of Carbon Management

The recent election of Donald Trump as the 47th president of the United States signals potential shifts in the nation’s approach to climate policies and carbon management.

While his return to office may slow down federal support for decarbonization efforts, it does not necessarily imply a total derailment of carbon capture and removal strategies.

Companies like Exxon Mobil, Chevron, and emerging industry players are leading initiatives that may sustain momentum in the sector.

Here’s a closer look at the companies and programs set to play a crucial role in this evolving landscape.

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Trump’s Stance on the Inflation Reduction Act (IRA) and Its Impact

Under President Joe Biden, the Inflation Reduction Act (IRA) became a cornerstone for advancing U.S. carbon management efforts.

This legislation allocates resources to support a range of climate technologies, including wind, solar, electric vehicles (EVs), hydrogen, and carbon capture and storage (CCS) initiatives.

Trump, however, has openly criticized the IRA, calling it a “green new scam,” and plans to rescind any unspent funds, potentially scaling back support for renewable energy and carbon management.

Yet, industry insiders suggest Trump’s position may soften as he works with Senate Republicans and representatives of the oil industry.

Former White House National Climate Adviser GINA MCCARTHY shared her perspective on the situation, saying, “Attempts to upend the IRA would be a fool’s errand.”

According to McCarthy, the IRA’s economic benefits and bipartisan support across state and federal levels make it a resilient policy that might endure the new administration’s scrutiny.

Exxon Mobil and Chevron: Leaders in Carbon Capture and Storage

Exxon Mobil and Chevron are at the forefront of the carbon capture field, making significant investments to reduce their environmental footprint.

Thanks to IRA incentives, these companies are constructing carbon sequestration sites in Texas and Louisiana, aiming to store carbon emissions from major industrial sources.

Exxon Mobil’s recent Q3 earnings report emphasized its dedication to carbon capture, highlighting its historic offshore storage agreement and commitments totaling 6.7 million tons of CO2 annually.

Exxon CFO KATHY MIKELIS noted the importance of IRA support, saying, “There’s a lot in the IRA that’s helping to support projects across the country, which also helps to support economic growth and job growth.”

With the possibility of IRA rollback, these companies’ strategies may face adjustments, but their established projects showcase a commitment to carbon capture that could persist beyond federal incentives.

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The Future of Carbon Removal Technologies in the U.S.

The IRA has also been pivotal for carbon removal innovations, such as direct air capture (DAC) and bioenergy with carbon capture and storage (BECCS).

These technologies are essential for the U.S. carbon management landscape, with two DAC hubs funded by the Department of Energy (DOE) attracting significant private capital.

For instance, BlackRock invested $550 million into Occidental’s Stratos DAC plant in Texas, further securing the future of carbon removal in the region.

Additionally, UK-based energy producer Drax has plans to invest up to $12.5 billion to develop BECCS facilities across North America.

The company recently launched its U.S. subsidiary, Elimini, to assess over 20 sites for potential carbon capture installations.

These initiatives illustrate the robust interest in carbon removal, supported by job growth estimates from Lawrence Livermore National Labs, which predict that carbon capture and removal could create 440,000 jobs nationwide.

Broader Legislative Support for Carbon Management

While the IRA has been instrumental in funding carbon removal, it’s not the only legislative pillar supporting this industry.

A suite of additional programs has fueled investment in carbon capture projects and may continue to do so regardless of federal shifts. These programs include:

• The Bipartisan Infrastructure Law (BIL)
• The Energy Act of 2020
  
• The Utilizing Significant Emissions with Innovative Technologies (USE IT) Act
  
• The FUTURE Act
  

Although these programs may not provide the same level of funding as the IRA, they represent a stable foundation for carbon removal.

Without the IRA, the industry may experience slower growth, but these programs still underscore a broader commitment to carbon management that could weather political changes.

International Efforts in Carbon Management: The Role of the EU and UK

While U.S. policy shifts could affect the domestic market, the international community is poised to advance carbon management technologies.

Following the IRA’s enactment, European nations have ramped up their own efforts, with the UK government announcing a $28 billion carbon capture package.

The European Commission is also pursuing aggressive carbon reduction targets, aiming to capture 280 million tons of CO2 annually by 2040.

European Commissioner for Climate Action WOPKE HOEKSTRA emphasized Europe’s dedication to carbon capture, signaling that the EU will continue to prioritize innovation in this field. “The Commission has to take a leadership role in driving the development of carbon capture,” Hoekstra explained.

These actions represent a strong response from Europe, which is positioning itself as a leader in carbon management in the face of changing U.S. policies.

Growing Carbon Capture Initiatives in Asia and Canada

Carbon capture isn’t limited to North America and Europe; other regions, including Asia and Canada, are advancing their own strategies to address emissions.

In Southeast Asia, Japan is exploring carbon storage options across the Pacific, with potential partnerships from Alaska to Indonesia.

Canada has become an emerging hub for carbon management innovation, with companies such as Deep Sky making significant strides in establishing a carbon removal innovation center.

Carbon Management’s Future Under the New Administration

A Trump presidency may bring challenges to decarbonization, but carbon capture and removal could remain steady due to the industry’s investments and international commitments.

The U.S. may become more inward-focused, but demand for carbon management is expected to continue through private investments and state-level support.

According to McKinsey, the carbon removal industry could become a $1.3 trillion market, even as federal support in the U.S. may fluctuate.

The market’s potential shows how robust this field is and how essential it will remain as companies, states, and international partners work together to address global emissions.

While some renewable energy initiatives may face slowdowns, carbon capture and removal projects appear well-positioned to adapt to these new circumstances.