Between CO2 capture and hydrogen production from fossil sources, North America and Europe have spent tens of billions of public money to subsidize solutions that merely prolong the life of fossil fuels themselves. These subsidies could increase by as much as 8 times in the coming decades.
Hidden Fossil Fuel Subsidies, the estimates from Oil Change International
For the past 40 years, North American and European governments have spent over $30 billion in public funds on CO2 capture and hydrogen subsidies. Despite this substantial investment, these solutions remain immature and ineffective in reducing emissions, merely extending the life of fossil fuels. Essentially, these are disguised fossil fuel subsidies.
According to a report by Oil Change International, these hidden subsidies could balloon to $115 billion for carbon capture technologies and $240 billion for hydrogen over the coming decades. The report highlights public funding for these key transition solutions, which are central to the fossil fuel agenda.
Who’s Funding Hidden Fossil Fuel Subsidies?
The U.S. leads the charge with over $12 billion allocated over 40 years, followed by Norway with $6 billion and Canada with $3.8 billion. The European Union is just behind with $3.6 billion, while the Netherlands has contributed $2.6 billion.
In many cases, these subsidies are not even particularly concealed. The U.S. and Canada have spent $4 billion subsidizing carbon capture for enhanced oil recovery (EOR), which involves injecting CO2 to increase extractable oil, effectively using public funds to support oil production.
False Solutions
Despite massive funding, CO2 capture technology remains far from fulfilling its promises. Current global projects have a cumulative capacity of just 51 million tons of CO2 per year, or 0.1% of total global emissions. A 2021 study cited by Oil Change International found that blue hydrogen—produced from fossil fuels with CO2 recovery—has an even higher emissions footprint than simply extracting and burning fossil gas. Yet, most subsidies for hydrogen production have gone to such high-emission projects.
“The carbon capture and hydrogen subsidies prolong the fossil fuel industry, boosting corporate profits and reversing progress in redirecting public funds from dirty energy to a fair energy transition,” the report states. “While carbon capture projects fail, they are used to justify expanding fossil fuels, diverting investments from effective alternatives like renewable energy, energy storage, and energy efficiency.”
