I'm no chemist but if you go very science fantasy you can maybe try and justify the lack of existence bit by saying that some specific microscopic lifeform is able to decompose the material relatively fast even in real-life inhospitable conditions, which makes the formation of fossil fuels very scarce. Probably gonna have to handwave a lot of the ecological and biological implications of that though. It's important to note that even if fossil fuels were never abundant, there are many forms of fuel that are just as harmful that could also be used in such a world, so that would probably go into direct contradiction with the notion that capitalism is dependent on fossil fuels.

But there's always the possible alternative that humanity never properly figured out thermodynamics and heat engines, and steam engines never got advanced enough for widespread use. That way things like metallurgy, pitch torches, pyres to the Outer Gods, Greek fire and other fossil-fuel-based fun stuff can exist, without any "Industrial Revolution" based on automation. In either case slavery and serfdom should probably play a very large role in your fiction as that's usually the second favourite thing of the powerful classes after automation. I think capitalism is still possible in such circumstances, but a global capitalist hegemony would prove very difficult without the mass production of bullets and tools to maintain control of the colonies. You could even have some minor (compared to the current one) humanmade climactic events like the Roman Warm Age under such conditions.