The CEO of multinational Italian energy company Enel has expressed doubts about the usefulness of carbon capture and storage, saying the technology is not a solution to the climate problem.
“We have tried and tried – and when I say we, I mean the power industry,” Francesco Starace told CNBC’s Karen Tso on Wednesday.
“You can imagine, we have tried very hard in the last 10 years – maybe more, 15 years – because if we had a reliable and economically interesting solution, why would we go and stop all these coal-fired power plants? [when] could we decarbonize the system? “
The European Commission, the EU’s executive body, described carbon capture and storage as a set of technologies focused on “capturing, transporting and storing CO2 emitted from power plants and industrial facilities”.
The idea is to keep CO2 out of the atmosphere by storing it in suitable underground geological formations.
The Commission said the use of carbon capture and storage is “important” when it comes to reducing greenhouse gas emissions. This view is based on the assertion that much of industry and electricity generation will continue to depend on fossil fuels in the coming years.
However, Enel Starace appears to be skeptical about the potential for carbon capture.
“The thing is, it doesn’t work, it hasn’t worked for us so far,” he said. “And here’s a rule of thumb: if the technology really isn’t picking up steam in five years – and here we’re talking more than five, we’re talking about 15, at least – you better give it up.”
According to Starace, there are other climatic solutions. “Basically, stop emitting carbon,” he said.
“I’m not saying it’s not worth trying again, but we’re not going to do it. Maybe other industries can put in more effort and be successful. This is not a solution for us. “
Carbon capture technologies are often seen as a source of hope for reducing global greenhouse gas emissions, which is featured prominently in countries’ climate plans as well as in the “zero clean” strategies of some of the world’s largest oil and gas companies.
Proponents of these technologies believe they can play an important and diverse role in achieving global energy and climate goals.
However, climate researchers, campaigners and environmental groups have long argued that carbon capture and storage technologies are prolonging the world’s dependence on fossil fuels and distracting from a much-needed turn towards renewable alternatives.
Starace spoke after Enel published its strategic plan for 2022-24 and outlined its goals for the years to come. Among other things, by 2030, Enel will make direct investments of 170 billion euros (190.7 billion dollars).
Direct investment in renewable energy assets owned by Enel will amount to 70 billion euros. The total installed renewable capacity, or directly owned by Enel, is expected to reach 129 gigawatts by 2030.
In addition, Rome-based Enel said it has moved its zero-target commitment – a target that applies to both direct and indirect emissions – to 2040, up from 2050.
In terms of fossil fuels, the group wants to exit coal-fired generation by 2027 and exit gas-fired by 2040.
Enel also said that in the period from 2021 to 2024, shareholders “expected to receive a fixed dividend per share … which is planned to increase by 13% to 0.43 euros per share.”
During an interview with CNBC, Starace was asked about Enel’s higher dividend projections and the broader debate about how to invest in so-called “sin stocks” – in this case, major polluters in the energy space – and still make good returns. especially in terms of dividends.
“It’s all about risk reward,” he said. “And at the end of the day, I see nothing wrong with an increasingly risky business. [being] … Forced to increase dividends if you want to attract investors. “
“We are trying to say that this is a tipping point, there is a moment when the risk becomes unbearable, no matter what dividend you want to distribute, and it is approaching,” he said.
“So in this case, what you need to do is avoid that risk, get rid of your carbon footprint, and also make sure that when you put the word ‘clean’ before zero, that ‘clean’ doesn’t become some kind of trick. with which you do not actually decarbonize your operations. “
“We say that we will have zero carbon, which means that we are not going to give off carbon, and therefore we will [not] … We need to plant trees to offset this carbon. “
However, Starace acknowledged that trees would be needed over the next centuries to remove the carbon left in the atmosphere from historic emissions.
—Sam Meredith of CNBC contributed to this article.