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Heat waves, droughts, and forest fires across Europe and America epitomize how important consistent and rapid action on climate change is. The race is on to develop technologies that help mitigate climate change is on.
Carbon Capture and Storage (CCS) technologies have faced criticism in the past, based on their environmental impact and their use by the fossil fuel industry. However, the Intergovernmental Panel on Climate Change has concluded that CCS will be a necessary part to bring global carbon dioxide emissions to net zero by 2050. Strategy& has developed a framework to assess the risks and benefits of CCS technologies, and how to ensure their efficient deployment, depending on local conditions and circumstances. The framework identifies the following factors for consideration when implementing carbon removal technologies:
- Exclusionary criteria to reduce the range of potential technologies that investors and companies need to consider, based on their carbon market acceptance
- Financial and non-financial factors that address wider sustainability issues and concerns when investing in CCS
- Overall investment strategy to determine the weight given to each of the factors within the carbon removal investment framework
University of Oxford Carbon Offset Terminology
Source: The Oxford Principles for Net Zero Aligned Carbon Offsetting, September 2020
Selecting the right long-term carbon removal technology
Our carbon removal framework focuses on the potential benefits for companies and investors of CCS technologies for long-lived carbon removals. It provides a clear guide to how companies and investors can make a structured, comprehensive assessment of four major long-lived CCS technologies.
Once non-viable technologies are excluded, companies and investors should consider both financial and non-financial factors to make their decisions. We have identified four key factors to be considered. Each of these should be aligned and weighted with a company’s ESG strategy or – where available – its decarbonization strategy.
Sustainable impacts
Resource intensity
Perception
Profitability and maturity
“Carbon dioxide removal are required to limit global warming to 1.5 degrees. Investors have the opportunity now to take strategic investments into this emerging technology.”
Comparison of different long-lived carbon removal technologies
Direct air and bioenergy carbon capture technologies both leverage industrial processes for removing carbon from the atmosphere. Capture methods include chemical absorption, membrane separation, calcium or chemical looping, and physical separation. Transportation and storage of carbon dioxide can be far more difficult than capturing it, with most underground storage involving the injection of CO2 gas into geological formations. Other emerging methods include storing stabilized carbon in abandoned mines, salt deposits, the seabed, or capturing carbon for long-term storage in materials like concrete and cement.
The following relatively mature technologies are already producing viable use cases with significant business and investment potential:
- 1Direct air carbon capture and storage
- 2Bioenergy with carbon capture and storage
- 3Microalgae carbon capture and storage
- 4Cement carbon capture and storage
Kelsey Pace, Ferdinand Habbel and Lukas Wendt also co-authored this study. The authors would like to thank Adrian Del Maestro and Sammy Lakshmanan for their valuable contributions to this report.
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