Carbon capture and storage (CCS) is the latest advancement in the ever-evolving energy industry. This expensive technology could potentially reduce global greenhouse gas emissions by capturing carbon dioxide and storing it in huge subterranean reservoirs – this process is known as “carbon capture and sequestration”. The UK Government recently announced it will invest £20billion in CCS projects over the next two decades, setting up four industrial-scale clusters by 2030.
This is a big step in the right direction towards their net zero carbon emissions goal by 2050. With this news, investors might be wondering how they can benefit from investing in the technology.
The biggest players in the industry are typically oil and gas companies, such as BP and Shell. BP was chosen among the 8 carbon capture and storage projects selected by the UK Government, and is the single largest investment in the Jupiter UK Special Situations Fund, with a 6 percent total share. It has netted returns of 11.3 percent in the past year, and 76.5 percent over a three-year period.
VH Global Energy Opportunities, an investment trust listed on the London Stock Exchange, is one possibility for getting involved with carbon capture. It has ongoing charges of 1.4 percent, and the investment company holds two carbon capture projects – including one which sells carbon dioxide to the food and beverage industry.
Drax, a FTSE 250 company, was initially excluded from the Government’s plans but has since been invited to discuss a £2billion investment package. Its share price is currently down 24.5 percent in the past year and is largely invested in the Jupiter UK Alpha fund, which returns 4.3 percent annually and has a total of a £30.5million stake.
For those looking to take greater risks, Aker Carbon Capture could be a potential investment in the Oslo stock exchange. Its shareholders have seen a 19.4 percent share price increase in the past year. U.S. oil giant Occidental Petroleum is also involved in carbon capture projects through its subsidiary Oxy Low Carbon Ventures. Its shares have grown by 8.5 percent in the last year.
Ultimately, investing in carbon capture and storage technology is a big decision. It is important to ensure that you are familiar with the risks involved before investing and always research the specific companies you are interested in. There is still a lot to be established around this new technology but it is an important step forward in the fight against climate change.
