Phillips 66 Post-Combustion Capture, $2.4 B Capex, Shell Tech Deal, and 2 Refinery Projects (2025)

Post-Combustion Capture Projects, Phillips 66 Focus on Proven Tech

In 2025, Phillips 66 solidified a pragmatic, risk-averse carbon capture strategy, concentrating on deploying commercially proven technology at a key asset rather than pursuing speculative ventures. This approach contrasts with the period between 2021 and 2024, which involved more strategic evaluation, and marks a decisive shift toward execution in a favorable regulatory environment.

• The company’s flagship initiative is the implementation of Shell’s CANSOLV carbon capture technology at its 221, 000-b/d Humber Refinery in the United Kingdom. This project leverages a mature, post-combustion amine-based solvent technology (TRL 9), minimizing technological risk on a large-scale industrial application.
• This focused UK strategy is juxtaposed with a simultaneous asset transformation in the US, where Phillips 66 announced the closure of its Wilmington refinery in Q 4 2025 for conversion into a renewable fuels facility. This dual approach pairs direct emissions capture with a pivot to low-carbon fuel production.
• The choice to use a high-readiness technology is significant in a market where 18 out of 31 demonstration projects were reported cancelled as of May 2025. This underscores a strategy to prioritize project certainty over pioneering unproven methods. Other sectors are seeing similar diversity in decarbonization, from microalgae carbon capture pilots to advanced SMR development.
• Unlike competitors such as Conoco Phillips, which are assessing a wider array of CCS opportunities through various joint industry partnerships, Phillips 66’s 2025 activity shows a clear preference for a single, high-impact project with a defined technology partner.

$2.4 B in Capex, Phillips 66 2026 Strategic Funding

The financial foundation for Phillips 66’s decarbonization strategy was cemented with a forward-looking capital budget increase, signaling commitment to its refining and midstream projects where carbon capture initiatives are housed. This funding arrives as the global CCUS market, valued between $3.98 billion and $7.78 billion in 2025, is projected for significant growth.

• On December 15, 2025, Phillips 66 approved a $2.4 billion capital budget for 2026, an increase from its $2.1 billion forecast for 2025. This budget allocates $822 million to Refining and $975 million to Midstream, the two segments central to its CCS plans.
• Project economics are heavily supported by government incentives, notably the US Section 45 Q tax credit, which provides $85 per ton for geologically stored CO 2 from industrial sources. This incentive structure creates a viable financial model when paired with advanced capture technologies aiming for costs of $35-40 per tonne.
• The company’s investment is complemented by substantial public funding, such as the $2.54 billion allocated for CCUS projects under the US Bipartisan Infrastructure Law, which de-risks private capital deployment across the industry.

Chart Outlines CO2 Capture Growth for Net-Zero

This chart illustrates the massive scale of CO2 capture growth required to meet global net-zero targets, justifying the need for substantial investments like Phillips 66’s $2.4B strategic capex.

(Source: Clean Air Task Force)

Table: Phillips 66 and Competitor Strategic Capital Allocations (2025)

Phillips 66 Alliance with Shell for UK Humber Project

Phillips 66’s 2025 partnership strategy was narrowly focused on technology acquisition for a single project, a departure from the broader, hub-based joint ventures pursued by industry peers. This approach secures access to proven technology for its most advanced decarbonization project.

• The primary partnership activity in 2025 was the technology licensing agreement with Shell to implement its CANSOLV CO 2 capture system at the Humber Refinery. This agreement, announced in May 2025, provides the technological backbone for the project.
• This project-specific collaboration contrasts with the strategy of competitors like Saudi Aramco, which in February 2025 entered a joint development agreement with SLB and Linde to establish a large-scale CCUS hub in Jubail, Saudi Arabia.
• In a parallel decarbonization effort, Phillips 66 signed a supply agreement in June 2025 to provide United Airlines with sustainable aviation fuel (SAF), creating a commercial offtake for its future low-carbon products derived from asset conversions.

Global Carbon Capture Project Landscape Visualized

This chart provides a global map of carbon capture projects, which helps to contextualize the significance and location of the UK Humber Project within the broader international CCUS landscape.

(Source: Springer Nature)

Table: Phillips 66 Strategic Alliances (2025)

UK vs US Focus, Phillips 66 Geographic Strategy for CCUS

The geographic focus of Phillips 66’s carbon capture efforts in 2025 was concentrated entirely on the United Kingdom, where a supportive industrial cluster policy and clear regulatory pathways enabled a major project to advance. This targeted approach leaves its significant US asset base without a declared CCS strategy, despite strong domestic incentives.

• The Humber Refinery in the UK is the clear epicenter of the company’s CCS activities. Its location within an established industrial hub with shared infrastructure goals makes it an ideal candidate for a large-scale decarbonization project. This represents a concrete step forward from the more generalized planning seen between 2021 and 2024.
• While the company advanced its UK project, it also announced the closure and conversion of its Wilmington, California, refinery in June 2025. This shows a regional strategy in the US focused on renewable fuels production rather than carbon capture at its refining assets.
• The absence of a declared CCS project for its major US refineries, such as the Wood River facility now fully owned by the company, is a notable gap. It suggests a wait-and-see approach in the US market, despite the availability of the lucrative $85/ton 45 Q tax credit.

US Carbon Removal Projected to Reach 1 Gt/yr

The chart quantifies the significant market potential for carbon removal in the US, providing essential context for Phillips 66’s geographic strategy and its focus on the US market.

(Source: Clean Air Task Force)

Technology Maturity, Phillips 66 Selects Commercial TRL 9 CANSOLV

Phillips 66 deliberately selected a mature, commercially available technology for its flagship carbon capture project, prioritizing execution certainty and de-risking its investment. This decision reflects a strategic choice to be a technology implementer rather than a developer, a significant shift from the industry’s earlier focus on pilot-scale and demonstration projects.

• The core of the Humber project is Shell’s CANSOLV system, a post-combustion capture technology with a Technology Readiness Level (TRL) of 9. This means the technology is proven at a commercial scale, drastically reducing deployment risk compared to emerging technologies still in the pilot phase (TRL 5-7).
• This choice is prudent given the high failure rate of CCS demonstration projects, where technical and economic challenges often hinder scalability. By adopting a proven solution, Phillips 66 can focus on integration and operational excellence rather than technology development.
• The targeted capture efficiency of amine-based solvents like CANSOLV is up to 90%, providing a clear pathway to significant emissions reductions from the refinery’s flue gas streams. This level of performance is critical for meeting regional emissions targets and justifying the capital investment.

SWOT Analysis, Phillips 66 Carbon Capture Execution

Phillips 66’s carbon capture strategy in 2025 is defined by its calculated, asset-centric focus in the UK, which offers clear strengths in a supportive environment but also exposes a lack of diversification and a measured pace in other key markets. The evolution from 2021-2023’s planning phase to 2025’s execution-focused activities has clarified both the opportunities and weaknesses of this approach.

Carbon Capture Projects Historically Underperform Goals

The chart illustrates the historical underperformance and risk associated with carbon capture projects, which is a key ‘Threat’ or ‘Weakness’ to be addressed in a SWOT analysis of Phillips 66’s execution strategy.

(Source: Clean Air Task Force)

Table: SWOT Analysis for Phillips 66 Carbon Capture Initiatives

Phillips 66 FID for Humber Project is the Next Key Milestone

The single most critical event to watch for is the Final Investment Decision (FID) for the Humber Refinery CCS project, which will confirm the project’s transition from planning to execution and validate the company’s capital commitment to large-scale decarbonization.

• If Phillips 66 announces a positive FID for Humber, watch for the disclosure of total capital investment, projected annual CO 2 capture volume (in Mtpa), and the names of offtake and storage partners. These details will be the first concrete metrics of the project’s scale and commercial structure.
• The deployment of the $2.4 billion in 2026 capital, particularly the $822 million allocated to Refining, is gaining traction. The allocation of a significant portion to the Humber project would be a strong signal of its priority.
• Conversely, a continued absence of announcements regarding CCS feasibility studies for major US assets like the Wood River refinery could indicate that the company’s strategy is to let others de-risk the US market first before committing capital, despite the available incentives.

The questions your competitors are already asking

This report covers one angle of Phillips 66’s commercial-scale carbon capture strategy. The questions that matter most depend on your work.

• What is actually happening with the Phillips 66 Humber Refinery CCS project since the Shell CANSOLV tech deal?
• What is the outlook for post-combustion capture deployment in the oil refining sector by 2030, given the high rate of project cancellations?
• How does Shell’s CANSOLV amine-based technology compare to emerging solutions for refinery post-combustion capture?
• Which other refinery operators are adopting post-combustion capture, and are they also choosing mature technologies like CANSOLV?

This report does not answer these. Enki Brief Pro does.

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