Exxon Mobil CEO Darren Woods has called on the US government to increase the CO2 tax credit.
In an interview with CNBC, Exxon Mobil’s CEO explained that the current 45Q tax credit listed in the IRS tax code is capped at $50 per ton of captured and stored CO2, whereas he believes that amount ought to at least be doubled.
This would, according to Woods, provide the necessary incentive for companies like Exxon to further develop their clean energy innovations, such as direct air capture (DAC) systems – “the holy grail” to Woods – and biofuels.
Exxon Mobil has estimated the carbon capture and storage (CCS) market to be worth $4 trillion by 2050.
And while Woods acknowledged the difficulty of achieving a higher carbon price, he did suggest starting by implementing policies in separate market sectors.
In the same interview, Exxon’s CEO also spoke about his vision of a world, where all cars are powered by electricity – as soon as 2040.
In his opinion, all sales of new gas cars will cease in 2040 everywhere in the world, with certain governments like California, Norway and Washington that have set even more ambitious goals (as early as 2025 in Norway).
This puts Exxon in a unique position compared to other fossil fuel majors, such as the world’s largest oil company Saudi Aramco, which recently voiced its expectations that 90% of all vehicles will still be powered by gas by mid-century.
Others have also been skeptical of climate targets and have expressed confidence that they will not be met in time, such as industry analyst IHS Markit.
Exxon Mobil, on the contrary, believes that many of these targets will, in fact, be exceeded, but does not see this fact as a threat to its business.
The company estimates that even if all new vehicles are electric in 2040, oil demand will only fall back down to 2013-14 levels, when the company was still profitable, hence it can also remain profitable in the future.