Trump’s Megalaw Boosts Occidental Petroleum’s Carbon Capture Subsidies

President Donald Trump’s recent legislation has significantly expanded tax incentives for carbon capture, with Occidental Petroleum poised to benefit the most. The law increases subsidies for using captured carbon dioxide to extract more oil from depleted wells or to produce low-carbon products. Occidental, the industry leader in carbon capture and enhanced oil recovery, operates over 3,200 CO2 injection wells, accounting for 37% of the U.S. total. Under the new tax code, companies can now claim $85 per ton of CO2 captured from industrial facilities and $180 per ton for CO2 extracted via direct air capture, regardless of its use. This shift allows Occidental to profit more from its existing infrastructure and investments in carbon reuse startups. The company is also building the world’s largest direct air capture plant, Stratos, which will benefit from the updated tax credits. However, critics argue that the increased subsidies may divert investments away from purely storing CO2, potentially exacerbating climate change. Occidental’s spokesperson emphasized the benefits of the tax changes for U.S. energy independence and industry growth, while the company’s CEO highlighted the role of carbon capture in extending oil production. The legislation came after significant lobbying and political spending by Occidental and the oil industry. Occidental donated $1 million to Trump’s inaugural committee and over $7 million to Republican congressional candidates. Despite concerns about environmental impacts, some analysts suggest the changes could advance carbon capture technology, offering a potential silver lining. In summary, Trump’s megalaw reshapes the fossil fuel industry, with Occidental set to gain substantial advantages through expanded subsidies, while sparking debates over its environmental implications.

Published: 8/4/2025