A Carbon Pact with Power: ExxonMobil and Calpine Team Up

Energy giants link up to expand carbon capture and storage, a key step toward U.S. net-zero goals

14 Oct 2025

ExxonMobil and Calpine have formed a new alliance to capture, transport, and store millions of tonnes of carbon dioxide each year, marking one of the most significant U.S. steps yet toward a large-scale carbon capture and storage (CCS) network.

Announced in April 2025, the agreement will see ExxonMobil transport and permanently store up to 2mn tonnes of CO₂ annually from Calpine’s Baytown Energy Center in Texas. The captured gas will move through ExxonMobil’s expanding Gulf Coast pipeline system and be injected into deep geological formations.

“This partnership shows what’s possible when industry leaders work together to scale up low-carbon solutions,” said Dan Ammann, president of ExxonMobil Low Carbon Solutions. “We’re building the backbone for a new kind of energy infrastructure that supports growth while cutting emissions.”

For Calpine, the deal offers a route to lower-carbon power generation without the cost of building its own CO₂ transport network. ExxonMobil, meanwhile, strengthens its position in a growing carbon management market, with existing contracts to handle about 16mn tonnes of CO₂ per year from industrial partners. Analysts say this scale could give the company a competitive advantage as demand for carbon storage rises under U.S. federal incentives such as the 45Q tax credit.

The initiative also illustrates how existing oil and gas infrastructure can be repurposed for carbon management. Pipelines originally built for hydrocarbons can often be adapted for CO₂ transport, reducing both costs and environmental impact from new construction.

Although the Baytown project remains in the engineering and permitting phase, experts view it as a model for future CCS expansion. If successful, it could support national efforts to meet 2050 net-zero targets by enabling broader industrial emissions capture across the Gulf Coast.

Regulatory approvals and community engagement will be key challenges ahead, but the partnership signals growing confidence that CCS can underpin the next phase of U.S. energy transition.