Carbon capture and storage makes most economic sense when deployed in hard-to-abate segments such as heavy industry, but who will stump up the billions required to build such projects? The Dutch government has answered that question by bearing a big slice of the cost burden of the Porthos CCS project in Rotterdam, and thereby handing a big subsidy to two of the world’s biggest oil companies. But the way the subsidy is structured aims to minimise the burden on Dutch taxpayers.

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The Port of Rotterdam told Reuters that the Dutch government is willing to approve a €2 billion funding application from a consortium that includes oil majors Shell and ExxonMobil. Alongside industrial partners Air Liquide and Air Products, they intend to use Porthos CCS to capture and store CO2 emitted by their factories and refineries in the Rotterdam port area.

Porthos is a joint venture between Dutch state gas company EBN, Dutch gas transportation company Gasunie a…