Carbon Capture Gains Scale with Exxon-Calpine Deal

Oil major to store 2mn tonnes of CO₂ a year from Baytown gas plant, expanding US carbon capture push

1 May 2025

A pact between ExxonMobil and Calpine, revealed on April 23rd, marks a notable shift in America’s carbon capture ambitions. Under the agreement, ExxonMobil will transport and permanently store up to 2 million tonnes of CO₂ a year from Calpine’s Baytown Energy Center in Texas, making it one of the country’s largest operational carbon capture efforts to date.

The deal is a signal moment for a technology long discussed but rarely deployed at scale. Calpine, the country’s biggest natural gas power producer, aims to lower emissions without sacrificing reliability. Its Baytown facility will generate electricity for around 500,000 homes and supply steam to nearby industries, all while reducing its carbon footprint. “Our partnership with ExxonMobil gives us the tools to lower emissions while keeping the lights on,” said a Calpine spokesperson.

For ExxonMobil, this is the sixth major carbon capture deal in its growing portfolio, bringing its contracted storage capacity to 16 million tonnes annually. Much of that carbon will flow through its Gulf Coast pipeline system, which is emerging as a key artery for industrial decarbonisation. Companies with limited means to store emissions themselves may now find a partner in ExxonMobil.

Federal subsidies, especially the expanded tax credits under the Inflation Reduction Act, are making such projects more attractive. So is pressure from investors to reduce emissions. Yet obstacles remain. Permitting pipelines is a slow process. Long-term liability rules for storage sites are still evolving. And critics argue that carbon capture lets emitters prolong reliance on fossil fuels.

Nonetheless, the ExxonMobil-Calpine tie-up provides a working model of industrial-scale carbon management. Rather than chasing distant breakthroughs, both firms are relying on existing technology, underpinned by federal support and growing commercial interest. As more heavy industries face pressure to clean up, they may follow suit.