As the demand for sustainability continues to rise among investors, major energy companies are turning their attention to carbon capture technologies. These innovative solutions offer a way to mitigate the impact of greenhouse gas (GHG) emissions while allowing for the continued production of oil and gas. By capturing and storing carbon dioxide (CO2) emissions, carbon capture, utilization, and storage (CCUS) technologies provide a pathway towards achieving net-zero targets without compromising on vital energy production.
Carbon Capture Technologies
CCUS, or carbon capture technologies, encompass a range of cutting-edge approaches designed to capture CO2 emissions from high-emitting activities. These activities mainly include power generation and industrial facilities that burn fossil fuels or biomass for fuel. The captured CO2 is then compressed, transported, and either used for various applications or stored safely underground.
Attracting Attention and Investment
The potential of CCUS technologies has caught the attention of major energy companies. ExxonMobil, for instance, has committed to achieving net-zero emissions by 2050 and has proposed a groundbreaking $100 billion carbon capture and storage program in Houston, Texas. Occidental Petroleum is also in the field, building a direct-air-capture plant that will contribute to emissions reduction efforts in West Texas. Policymakers have also recognized the importance of CCUS, with UK Prime Minister Boris Johnson pledging £1 billion in public funds to develop four major CCUS schemes by 2030. Notable entrepreneur and philanthropist Elon Musk has also stepped into the carbon capture arena, offering a $100 million prize through the Carbon Removal XPrize to drive the development of innovative carbon capture technologies.
The Potential and Benefits of CCUS
CCUS technologies offer immense potential in the fight against greenhouse gas emissions. Proponents argue that with improved technologies and scalability, CCUS could capture over 90% of CO2 emissions from industrial facilities and power plants. Given that energy production accounts for more than three-quarters of global GHG emissions, with power plants alone contributing around 42% and industrial activities adding over 16%, CCUS plays a vital role in reducing global emissions.
Beyond emission reduction, CCUS offers numerous additional benefits. Carbon capture technologies remove harmful pollutants like nitrogen oxides and sulfur oxides, benefiting both the environment and human health. Moreover, captured CO2 can be utilized in enhanced oil recovery efforts, fuel refinement, and the production of building materials, maximizing its value. Any excess CO2 can be safely stored underground in geological formations, ensuring minimal impact on the environment.
Addressing Concerns and Considerations
While CCUS holds promise, critics argue that investing in these technologies may prolong dependence on fossil fuels and divert attention from renewable alternatives. It is important to recognize that CCUS is still in its early stages of development, and its scalability is yet to be proven. The costs associated with research, development, and large-scale implementation of CCUS plants can be significant, posing challenges to widespread adoption.
Currently, there are only 21 large-scale CCUS industrial and power plants worldwide, with Climeworks’ Orca plant in Iceland leading the way. However, the cost of removing a single ton of CO2 at the Orca facility ranges from $600 to $800. Meeting the United Nations’ estimate of removing 10 billion tons of CO2 annually by 2050 seems cost-prohibitive at current pricing, potentially reaching up to $6 trillion per year. Scaling up CCUS capacity rapidly is crucial, with experts estimating the need to expand capacity from 40 million tons to at least 5,600 million tons to meet the goals outlined in the Paris Agreement.
Furthermore, concerns exist regarding the potential environmental impact of carbon transport and storage. Care must be taken to ensure that storing CO2 underground does not negatively impact biodiversity or natural rock formations.
American Century Investment’s Perspective
In considering carbon capture technologies, American Century Investment’s ESG team acknowledges their significance and potential. However, they view these technologies as part of a broader solution. American Century Investment emphasizes the transition towards renewable and transitional fuels as the primary focus for combating climate change. They believe that investments in carbon capture should be supplementary to reducing absolute emissions levels.
According to American Century Investment, companies can be considered “best-in-class” when they actively work to increase renewable production, shift towards transitional fuels, and decrease their overall consumption of fossil fuels. They advocate for restructuring industries to tackle climate change while ensuring continued economic activity. While recognizing the value of carbon capture in emissions reduction, American Century Investment does not view it as the sole foundation for climate change mitigation.
In conclusion, carbon capture technologies hold immense potential in the pursuit of reducing greenhouse gas emissions. Though there are challenges and concerns surrounding scalability and costs, investments in CCUS can complement efforts to transition towards renewable energy sources while reducing reliance on fossil fuels. By utilizing carbon capture technologies in conjunction with other sustainable practices, we can adopt a more comprehensive approach to mitigating climate change. While not a standalone solution, CCUS offers a valuable tool in the fight against climate change and can help pave the way for a more sustainable future.
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