Exxon Mobil’s Carbon Capture Strategy 2025: Powering AI Data Centers with Low-Carbon Energy

Exxon Mobil’s Commercial Scale Carbon Capture Projects Drive a New Business Model in 2025

In 2025, Exxon Mobil transformed its carbon capture and storage (CCS) activities from an internal research and development focus into a new commercial service line, strategically targeting the high-growth AI and data center industry.

• Between 2021 and 2024, the company’s efforts were centered on foundational technology development, such as extending its joint development agreement with Fuel Cell Energy Inc. in April 2024 to advance carbonate fuel cell technology for carbon capture through pilot testing and manufacturing scale-up.
• The strategic shift became evident in 2025 with the announcement of a partnership with Next Era Energy and Google to build a 1.2-gigawatt (GW) natural-gas-fired power plant integrated with CCS, specifically to serve AI data centers. This project aims to capture over 90% of CO 2 emissions.
• This new commercial focus was further solidified by a major CCS service agreement with power generator Calpine in April 2025. Under the deal, Exxon Mobil will transport and permanently store up to 2 million metric tons of CO 2 annually from Calpine’s Texas-based natural gas facility.
• Another key commercial deal emerged with the agreement to transport and store 680, 000 metric tons of biogenic CO₂ per year from Atmos Clear’s facility, a project directly linked to Microsoft’s carbon removal purchasing goals. This variety of agreements demonstrates a rapid transition to offering CCS as a scalable, third-party service.

Investment Analysis: Exxon Mobil’s Multibillion-Dollar Capital Commitments to Low-Carbon Ventures

Exxon Mobil is deploying substantial capital to build out its low-carbon business, with multi-billion-dollar long-term plans and strategic equity partnerships validating its financial commitment to CCS and related technologies.

• The company’s corporate plan outlines a significant allocation of approximately $20 billion for lower-emission projects between 2025 and 2030, providing the financial backbone for its CCS and hydrogen ventures.
• In September 2024, Abu Dhabi National Oil Company (ADNOC) underscored the value of these ventures by agreeing to acquire a 35% equity stake in Exxon Mobil’s planned low-carbon hydrogen and ammonia facility in Baytown, Texas, injecting significant external capital.
• The company is also making targeted technology investments, such as its $5.6 million partnership with Co Lab Software in March 2025 to develop an AI tool for engineering design, which enhances the efficiency of executing large-scale capital projects like CCS facilities.

Table: Exxon Mobil’s Strategic Investments in Low-Carbon and Enabling Technologies

Partnership Analysis: Exxon Mobil Forges a CCS Ecosystem with Tech Giants and Energy Producers

Exxon Mobil’s strategy relies on a purpose-built partnership network that connects its CCS capabilities with power producers, technology end-users, and international energy firms, creating a validated commercial ecosystem.

Data Center Growth Fuels Low-Carbon Demand

ExxonMobil’s global forecast shows a sharp increase in data center compute instances, validating the market need for lower-carbon energy solutions to power them.

(Source: Natural Gas Intelligence)

• The most significant strategic alliance is the December 2025 partnership with Next Era Energy and Google, which directly links Exxon Mobil’s gas and CCS offering to a major power developer and a hyperscale data center operator, validating the market need.
• The April 2025 agreement with Calpine establishes Exxon Mobil as a third-party decarbonization service provider, agreeing to transport and store up to 2 million metric tons of CO 2 annually for another major power generator.
• In September 2025, the company entered an agreement to store CO 2 for Atmos Clear, a deal directly connected to Microsoft’s carbon removal program, demonstrating that its CCS infrastructure is a tangible solution for Big Tech’s ESG goals.
• Before 2025, partnerships were more internally focused, such as working with IBM and Microsoft to apply AI for upstream optimization. The recent deals mark a clear pivot to external, customer-facing collaborations centered on decarbonization.

Table: Exxon Mobil’s Key Carbon Capture and Low-Carbon Partnerships

Geography: Exxon Mobil’s U.S. Gulf Coast Becomes the Hub for Its Low-Carbon Strategy

Exxon Mobil has deliberately concentrated its CCS and low-carbon hydrogen projects along the U.S. Gulf Coast, creating a strategic hub in Texas and Louisiana to leverage existing infrastructure, favorable geology, and proximity to industrial partners.

• Between 2021 and 2024, the company’s digital and operational efficiency initiatives were geographically dispersed, with AI-driven optimization in the Permian Basin (Texas) and Bakken Shale (North Dakota) and deep-water exploration in Guyana.
• Beginning in 2025, the geography of its low-carbon business became highly focused. The CCS agreement with Calpine is centered on a power facility in Texas.
• The partnership with Atmos Clear to store CO 2 for Microsoft’s needs is based in Baton Rouge, Louisiana, reinforcing the Louisiana-Texas corridor as its core operational zone for decarbonization services.
• Furthermore, the low-carbon hydrogen project with BASF and the facility co-funded by ADNOC are both located at Exxon Mobil’s existing hub in Baytown, Texas, signaling a strategy of expanding capabilities at established, advantageously located sites.

Technology Maturity: Exxon Mobil’s CCS Evolves from Pilot to Commercial Scale in 2025

Exxon Mobil’s carbon capture technology has transitioned from the pilot and demonstration phase to full-scale commercial application, a shift driven by securing large-volume contracts with third-party clients in the power and technology sectors.

• In the 2021-2024 period, the company’s efforts were focused on technology maturation. The extension of its partnership with Fuel Cell Energy in 2024 was aimed at completing pilot testing and solving manufacturing scale-up challenges, indicating a pre-commercial stage.
• The turning point to commercial maturity occurred in 2025. The agreements to transport and store millions of metric tons of CO 2 for Calpine and Atmos Clear are not pilots; they are commercial service contracts that confirm the technology is ready for market deployment.
• The plan to integrate CCS into a 1.2 GW power plant for the AI industry represents the highest level of technological readiness: a large-scale, integrated system designed to meet the strict reliability and performance demands of hyperscale data center customers.

SWOT Analysis: Examining Exxon Mobil’s Strategic Position in CCS for AI

Exxon Mobil’s CCS strategy capitalizes on its core engineering strengths to meet a new, high-growth market, though its success remains tied to the large-scale economics of CCS and its continued reliance on natural gas.

• Strengths: Proven expertise in managing large, complex energy projects and vast natural gas reserves are primary strengths, validated in 2025 by its ability to attract partners like Next Era and Google.
• Weaknesses: A historical reliance on siloed data systems was a key weakness, which the company began to resolve from 2023-2024 through its data unification project with Snowflake, enabling the AI-driven analytics required for these complex new ventures.
• Opportunities: The exponential growth in power demand from the AI industry created a major market opportunity, which Exxon Mobil seized in 2025 by offering a pragmatic, lower-carbon power solution that meets both energy and ESG needs.
• Threats: The strategy faces threats from regulatory hurdles, long-term CO 2 storage liability, and the cost-competitiveness of its gas-plus-CCS model compared to rapidly advancing renewables and battery storage.

Table: SWOT Analysis for Exxon Mobil’s CCS Strategy

Forward-Looking Insights: Exxon Mobil’s CCS Strategy Faces a Critical Execution Test

The central focus for Exxon Mobil’s low-carbon strategy in the year ahead will be the execution of its gas-plus-CCS power projects for the AI industry, as progress on these ventures will serve as the definitive proof point for its entire market pivot.

• The final investment decision (FID) for the 1.2 GW power plant partnered with Next Era Energy is the most critical upcoming milestone. A positive decision will signal market confidence and trigger a new phase of capital deployment.
• Scrutiny will be intense on Exxon Mobil’s ability to deliver on its promise of capturing over 90% of CO 2 emissions at commercial scale, as this performance metric is the foundation of its value proposition to ESG-conscious technology companies.
• The cost-competitiveness and operational reliability of this first-of-a-kind plant will be benchmarked against rapidly evolving renewable energy and long-duration storage solutions, determining the long-term viability of this business model.
• Success in this initial project is expected to unlock a pipeline of similar deals, cementing Exxon Mobil’s role as a critical infrastructure provider for the digital economy. Failure would call the entire strategy into question.

Frequently Asked Questions

What is Exxon Mobil’s new carbon capture strategy, and why are they targeting AI data centers?

In 2025, Exxon Mobil transformed its carbon capture and storage (CCS) activities into a commercial service line. It is strategically targeting the high-growth AI and data center industry due to its massive and growing demand for reliable power. The strategy is to provide a lower-carbon energy solution by integrating natural gas power plants with CCS technology, which captures over 90% of CO2 emissions, thereby meeting both the energy and ESG requirements of tech companies like Google.

How much is Exxon Mobil investing in its low-carbon business?

According to its corporate plan, Exxon Mobil is allocating approximately $20 billion for lower-emission projects between 2025 and 2030. This investment provides the financial foundation for its large-scale Carbon Capture and Storage (CCS) and hydrogen ventures.

Who are Exxon Mobil’s key partners in this new low-carbon strategy?

Exxon Mobil has built a partnership ecosystem that includes tech giants, power producers, and international energy firms. Key partners are Next Era Energy and Google for a new gas-plus-CCS power plant; power generator Calpine, for whom Exxon Mobil will store 2 million metric tons of CO2 annually; Atmos Clear, to store CO2 for Microsoft’s carbon removal program; and Abu Dhabi National Oil Company (ADNOC), which is a major co-investor in its Texas hydrogen facility.

Where are these new low-carbon and CCS projects primarily located?

Exxon Mobil is concentrating its CCS and low-carbon hydrogen projects along the U.S. Gulf Coast, creating a strategic hub in Texas and Louisiana. Specific locations mentioned include a power facility in Texas (for the Calpine project), Baton Rouge, Louisiana (for the Atmos Clear project), and Baytown, Texas, which serves as a hub for its hydrogen projects with partners like ADNOC and BASF.

Is Exxon Mobil’s carbon capture technology ready for commercial use?

Yes, the article indicates that the technology has moved from the pilot phase (2021-2024) to full commercial scale in 2025. This transition is demonstrated by the large-volume commercial service contracts signed with third-party clients like Calpine and Atmos Clear, and the plan to integrate CCS into a new 1.2 GW power plant. These are not pilot tests but market-ready deployments designed to operate at a commercial scale.