With increasing focus on CCUS, ESG Clarity speaks to two investors in this space.
Despite representing less than 0.1% of negative emissions use, carbon capture and storage are the latest methods being touted as key solutions to limit global warming to 1.5 degrees Celsius.
The Intergovernmental Panel on Climate Change this week mentioned such methods, preceded recently in the UK by chancellor Jeremy Hunt’s references in the Spring Budget, where he said he was allocating up to £20bn of support for the early development of carbon capture usage and storage (CCUS), “paving the way for CCUS across the country as we approach 2050”. Further to this, the UK government will introduce legislation to establish favourable tax treatment of payments made into so-called decommissioning funds by oil and gas as it related to repurposing decommissioned oil and gas assets in CCUS projects.
Finally, the EU Net Zero Industry Act announced on 16 March that carbon capture had made it into a list of strategically important initiatives that will see significant support.
With this in mind, ESG Clarity has spoken to two groups currently invested in CCUS about how they are navigating this space.
Reusing these emissions could boost the economy
Richard Lum, co-CIO at Victory Hill Capital Partners:
"The UK government has recognised the need to do more to promote the reuse of the captured emissions, rather than only backing sequestration. Reusing these emissions could boost the economy by supplying certain sectors such as the food and beverage and agriculture industries with valuable and much needed carbon dioxide gas.
The sustainable investment trust VH GSEO is invested in the construction of two combined heat and power plants in Worksop, Nottinghamshire, UK, which bring together gas-fired engines technology with a CCS system.
The first plant is expected to become operational in Q2 2023 with first power expected in Q1 2023, and is contracted under a long-term power purchase agreements (PPAs) with a well-known energy company. It will also benefit from a long-term CO2 offtake contract with a large specialty gas company.
The plant will benefit from the involvement and expertise of some of the world’s leading industrial technology companies including Rolls-Royce, Swedish industrial group, Climeon, Mitsubishi Heavy Industries Group subsidiary Turboden based in Italy, and privately held Swiss Carbon Capture technology manufacturer, ASCO Carbon Dioxide."
Opening-up energy access to cater for increasing demand and population growth