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Can ExxonMobil Turn Carbon Capture Into a Major Growth Market?
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Key Takeaways
ExxonMobil's Gulf Coast CCS network could handle up to 100 million metric tons of CO2 annually.
ExxonMobil has agreements to transport and store about 9 million metric tons of CO2 per year.
ExxonMobil's Rose project received Texas approval to store about 53 million metric tons of CO2 underground.
The world remains heavily dependent on conventional fuels, whose combustion releases significant amounts of carbon dioxide (CO2) into the atmosphere. ExxonMobil Holdings Corporation (XOM - Free Report) expects energy-related CO2 emissions to decline to roughly 30 billion metric tons by 2050 from 36 billion metric tons in 2025, supported by efficiency gains and lower-emission solutions such as carbon capture and storage (CCS).
CCS captures CO2 from industrial facilities before it reaches the atmosphere, transports it through pipelines and injects it deep underground for permanent storage. The technology is expected to scale significantly, with global CCS projected to increase from about 30 million metric tons of CO2 in 2025 to 2,000 million metric tons by 2050. However, meeting global climate goals would require roughly 7,000 million metric tons. Against this backdrop, ExxonMobil is building an end-to-end CCS business spanning CO2 capture, transportation and storage.
The U.S. Gulf Coast is a key focus for XOM because it accounts for about one-third of U.S. industrial CO2 emissions and already hosts much of ExxonMobil’s CCS pipeline network. The company estimates that this network can eventually handle up to 100 million metric tons of captured CO2 annually once fully developed. ExxonMobil already has agreements to transport and store about 9 million metric tons of CO2 per year for industrial customers, while projects with CF Industries and New Generation Gas Gathering already transport and store CO2.
XOM is further expanding its CCS customer base through work with Linde, Nucor, Lake Charles Methanol II and AtmosClear. The company’s plans gained additional momentum after Texas regulators approved the Rose carbon capture and storage project, designed to store about 53 million metric tons of customers’ CO2 in underground wells in Jefferson County, TX. Together, these initiatives highlight ExxonMobil’s efforts to establish CCS as a large-scale business while supporting industrial customers’ emissions-reduction goals.
Carbon Capture Gains Ground Across Energy Majors
Occidental Petroleum Corporation (OXY - Free Report) continues to advance carbon capture through its low-carbon ventures business, with management highlighting progress in direct air capture. OXY sees carbon capture supporting power generation and data-center development in the Permian, where captured CO2 can connect with its broader operations. The company’s STRATOS direct-air-capture project is progressing through commissioning, with full plant commissioning expected around the end of 2026 and operations set to begin in 2027. OXY expects about $400 million in low-carbon ventures capital spending to roll off beginning next year.
Baker Hughes Company (BKR - Free Report) is expanding its carbon-capture capabilities as investment in lower-carbon energy solutions grows. Rising spending across the energy value chain is supporting demand for carbon capture, power generation, natural gas infrastructure and energy management. BKR’s acquisition of Chart Industries adds carbon-capture technology, gas handling and thermal-management capabilities. These additions broaden BKR’s participation across the carbon capture, utilization and storage value chain and enhance Baker Hughes’ ability to provide integrated solutions to energy and industrial customers.
XOM’s Price Performance, Valuation & Estimates
ExxonMobil shares have gained 46% over the past year compared with the industry’s 45.5% growth.
Image Source: Zacks Investment Research
From a valuation standpoint, XOM trades at a trailing 12-month enterprise-value-to-EBITDA (EV/EBITDA) of 9.13X. This is above the broader industry average of 5.83X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for XOM's 2026 earnings has remained constant over the past seven days.
View the Zacks #1 Rank List
Image: Bigstock
Can ExxonMobil Turn Carbon Capture Into a Major Growth Market?
Key Takeaways
The world remains heavily dependent on conventional fuels, whose combustion releases significant amounts of carbon dioxide (CO2) into the atmosphere. ExxonMobil Holdings Corporation (XOM - Free Report) expects energy-related CO2 emissions to decline to roughly 30 billion metric tons by 2050 from 36 billion metric tons in 2025, supported by efficiency gains and lower-emission solutions such as carbon capture and storage (CCS).
CCS captures CO2 from industrial facilities before it reaches the atmosphere, transports it through pipelines and injects it deep underground for permanent storage. The technology is expected to scale significantly, with global CCS projected to increase from about 30 million metric tons of CO2 in 2025 to 2,000 million metric tons by 2050. However, meeting global climate goals would require roughly 7,000 million metric tons. Against this backdrop, ExxonMobil is building an end-to-end CCS business spanning CO2 capture, transportation and storage.
The U.S. Gulf Coast is a key focus for XOM because it accounts for about one-third of U.S. industrial CO2 emissions and already hosts much of ExxonMobil’s CCS pipeline network. The company estimates that this network can eventually handle up to 100 million metric tons of captured CO2 annually once fully developed. ExxonMobil already has agreements to transport and store about 9 million metric tons of CO2 per year for industrial customers, while projects with CF Industries and New Generation Gas Gathering already transport and store CO2.
XOM is further expanding its CCS customer base through work with Linde, Nucor, Lake Charles Methanol II and AtmosClear. The company’s plans gained additional momentum after Texas regulators approved the Rose carbon capture and storage project, designed to store about 53 million metric tons of customers’ CO2 in underground wells in Jefferson County, TX. Together, these initiatives highlight ExxonMobil’s efforts to establish CCS as a large-scale business while supporting industrial customers’ emissions-reduction goals.
Carbon Capture Gains Ground Across Energy Majors
Occidental Petroleum Corporation (OXY - Free Report) continues to advance carbon capture through its low-carbon ventures business, with management highlighting progress in direct air capture. OXY sees carbon capture supporting power generation and data-center development in the Permian, where captured CO2 can connect with its broader operations. The company’s STRATOS direct-air-capture project is progressing through commissioning, with full plant commissioning expected around the end of 2026 and operations set to begin in 2027. OXY expects about $400 million in low-carbon ventures capital spending to roll off beginning next year.
Baker Hughes Company (BKR - Free Report) is expanding its carbon-capture capabilities as investment in lower-carbon energy solutions grows. Rising spending across the energy value chain is supporting demand for carbon capture, power generation, natural gas infrastructure and energy management. BKR’s acquisition of Chart Industries adds carbon-capture technology, gas handling and thermal-management capabilities. These additions broaden BKR’s participation across the carbon capture, utilization and storage value chain and enhance Baker Hughes’ ability to provide integrated solutions to energy and industrial customers.
XOM’s Price Performance, Valuation & Estimates
ExxonMobil shares have gained 46% over the past year compared with the industry’s 45.5% growth.
From a valuation standpoint, XOM trades at a trailing 12-month enterprise-value-to-EBITDA (EV/EBITDA) of 9.13X. This is above the broader industry average of 5.83X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for XOM's 2026 earnings has remained constant over the past seven days.
Image Source: Zacks Investment Research
XOM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.