The CEO of multinational Italian energy firm Enel has expressed doubt on the usefulness of carbon capture and storage, suggesting 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 in the past 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 plants [when] we could decarbonize the system?”
The European Commission, the EU’s executive arm, has described carbon capture and storage as a suite of technologies focused on “capturing, transporting, and storing CO2 emitted from power plants and industrial facilities.”
The idea is to stop CO2 “reaching the atmosphere, by storing it in suitable underground geological formations.”
The Commission has said the utilization of carbon capture and storage is “important” when it comes to helping lower greenhouse gas emissions. This view is based on the contention that a substantial proportion of both industry and power generation will still be reliant on fossil fuels in the years ahead.
Enel’s Starace, however, seemed skeptical about carbon capture’s potential.
“The fact is, it doesn’t work, it hasn’t worked for us so far,” he said. “And there is a rule of thumb here: If a technology doesn’t really pick up in five years — and here we’re talking about more than five, we’re talking about 15, at least — you better drop it.”
There are other climate solutions, Starace said. “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 try harder and succeed. For us, it is not a solution.”
Carbon capture technology is often held up as a source of hope in reducing global greenhouse gas emissions, featuring prominently in countries’ climate plans as well as the net-zero 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.
Climate researchers, campaigners and environmental advocacy groups, however, have long argued that carbon capture and storage technologies prolong the world’s fossil fuel dependency and distract from a much-needed pivot to renewable alternatives.
Plans to increase shareholder dividends
Starace was speaking after Enel published a strategic plan for 2022-24 and laid out its aims for the years ahead. Among other things, Enel will make direct investments of 170 billion euros ($190.7 billion) by 2030.
Direct investments in renewable energy assets that Enel will own are set to hit 70 billion euros. Consolidated installed renewable capacity, or capacity that is directly owned by Enel, is expected to reach 129 gigawatts by 2030.
In addition, Enel, which is headquartered in Rome, said it had brought forward its net-zero commitment — a goal which relates to both direct and indirect emissions — to 2040, having previously been 2050.
On the fossil fuel front, the group wants to exit coal generation by the year 2027, with its exit from gas generation taking place by 2040.
Enel also said that, between 2021 and 2024, shareholders were “expected to receive a fixed Dividend Per Share … that 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 wider debate about how one could be invested in so-called “sin stocks” — in this instance, big polluters within the energy space — and still get good returns, particularly on the dividend side of things.
“It’s all about risk rewards,” he said. “And at the end of the day, I don’t see anything wrong with an increasingly risky business [being] … forced to increase dividends if you want to attract investors.”
“What we’re trying to say is there is a breaking point, there is a point in which the risk becomes unbearable no matter what dividends you want to distribute, and that 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’ doesn’t become some kind of a trick around which you don’t decarbonize, really, your operations.”
“We’re saying we’re going to be zero carbon, which means we’re not going to emit carbon and we will, therefore [not] … need to plant trees to offset that carbon.”
Starace acknowledged, however, that trees would be required over the next centuries to remove carbon left in the atmosphere due to historic emissions.
—CNBC’s Sam Meredith contributed to this article.