One CEO skeptical of technology for carbon capture and storage

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CEO of the multinational Italian energy company Enel has expressed doubts about the usefulness of carbon capture and storage, suggesting that the technology is not a climate solution.

“We have tried and tried – and when I say ‘we’, I mean the electricity industry,” Francesco Starace told CNBC’s Karen Tso on Wednesday.

“You can imagine, we tried hard for the last 10 years – maybe more, 15 years – because if we had a reliable and economically interesting solution, why would we go and shut down all these coal power plants [when] could we trigger the carbon dioxide system? “

The European Commission, the EU’s executive arm, has described carbon capture and storage as a set of technologies focused on “CO2 capture, transport and storage from power plants and industrial plants.”

The idea is to stop CO2 from “reaching the atmosphere by storing it in suitable underground geological formations.”

The Commission has said that the use of carbon capture and storage is “important” in helping to reduce greenhouse gas emissions. This view is based on the statement that a significant part of both industry and power production will still be dependent on fossil fuels in the coming years.

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However, Enel’s Starace seemed skeptical about the potential of carbon capture.

“In fact, it does not work, it has not worked for us so far,” he said. “And there’s a rule of thumb here: If a technology doesn’t really take off in five years – and here we’re talking about more than five, we’re talking about at least 15 – it’s best you let it go.”

There are other climate solutions, Starace said. “Basically, stop emitting coal,” he said.

“I’m not saying it’s not worth trying again, but we will not do it. Maybe other industries can try harder and succeed. For us, there is no solution.”

Coal separation technology is often cited as a source of hope to reduce global greenhouse gas emissions, with a prominent place in countries’ climate plans as well as in the 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 meeting global energy and climate goals.

However, climate scientists, activists and environmentalists have long argued that carbon capture and storage technology extends the world’s fossil fuel dependence and distracts from a much-needed pivot to renewable alternatives.

Plans to increase shareholders’ dividends

Starace spoke after Enel published a strategic plan for 2022-24 and set its goals for the coming years. Among other things, Enel will make direct investments of 170 billion euros (190.7 billion dollars) by 2030.

Direct investments in renewable energy assets that Enel will own will reach EUR 70 billion. Consolidated installed renewable capacity, or capacity directly owned by Enel, is expected to reach 129 gigawatts by 2030.

In addition, Enel, headquartered in Rome, said it has moved its net-zero commitment – a target related to both direct and indirect emissions – to 2040, after being 2050 earlier.

On the front for fossil fuels, the group wants to end coal production by 2027, with its withdrawal from gas production by 2040.

Enel also said that shareholders between 2021 and 2024 “were expected to receive a fixed dividend per share … which is planned to increase by 13%, up to 0.43 euros / share.”

During his interview with CNBC, Starace was asked about Enel’s higher dividend forecast and the broader debate on how to invest in so-called “sin stocks” – in this case major polluters in the energy sector – and still get good returns, especially on the dividend side.

“It’s all about risk rewards,” he said. “And in the end, I see nothing wrong with an increasingly risky business [being] … forced to increase dividends if you want to attract investors. “

“What we are trying to say is that there is a turning point, there is a point where the risk becomes unbearable no matter what dividend you want to distribute, and it is approaching,” he said.

So in our case, what you need to do is get out of this risk, get out of the carbon footprint and also make sure that when you put the word “net” in front of zero, this “net” does not become some kind of trick as you really does not remove its operations around. “

“We say we will be zero carbon, which means we will not emit coal and we will therefore [not] … need to plant trees to compensate for that carbon. “

Starace acknowledged, however, that in the coming centuries, trees would be required to remove carbon that remains in the atmosphere due to historical emissions.

—CNBC’s Sam Meredith contributed to this article.


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