Sustainable investing

Carbon capture and storage

Carbon capture and storage (CCS) is the process of capturing waste CO2 and placing it into a geological storage site in such a way that it will not re-enter the atmosphere. While still too small scale to make a real difference to global warming, the technology is improving and the use of it is growing. It can also be used to generate carbon credits that can be sold for offsetting purposes.

CCS uses several technologies, including absorption, chemical looping and membrane gas separation to prevent the CO2 generating by industrial processing from entering the air. It is primarily aimed at large new build industrial facilities or real estate projects; retrofitting it to existing facilities such as power stations is currently prohibitively expensive

1306629592-min-800px.jpg

Carbon credit/offset projects. Source: carboncredits.com

In order for CCS to be effective, concentrated emissions are necessary. A carbon capture system placed on top of a factory, for example, works very well and is fairly cost efficient. There are currently 35 commercial facilities using CCS, capturing 45 million tons of CO2 per year. A further 300 CCS projects are planned, with the target of capturing 220 million tons of CO2 per year by 2030.

As the wide-scale application of CCS necessary to make an impact on climate mitigation is many years away, investors subsequently view carbon capture as not currently having the scale to make a meaningful difference to global emissions. Instead, natural carbon capture methods led by restoration of natural habitats have received a great focus and investor interest.

CCS can be used as part of carbon offsetting – where a company can show that it has taken action to reduce its carbon footprint. An offset carbon credit can be generated for every ton of CO2 or CO2 equivalent that a company stops from entering the atmosphere. This can then be used to mitigate other emissions for which CCS or natural methods such as reforestation are not available.

Creating returns that benefit the world we live in

Carbon removal technology

Direct air capture (DAC) technology that can actually remove carbon by sucking it out of the air is in its infancy. The captured CO2 can also be used in food processing or combined with hydrogen to produce synthetic fuels, rather than being stored.

The CO2 that is saved can be used to generate carbon credits for offsetting other emissions. There are currently a few projects up and running which are generating credits worth about USD 750 a ton. While small, the DAC market is expected to grow to be able to capture 60 million tons of CO2 by 2030, as shown in the chart below.

Let's keep the conversation going

Keep track of fast-moving events in sustainable and quantitative investing, trends and credits with our newsletters.

Stay updated
Robeco

Robeco aims to enable its clients to achieve their financial and sustainability goals by providing superior investment returns and solutions.

Important information This disclaimer applies to any documents and the verbal or written comments of any person in presentations or webinars on this website and taken together is referred to herein as the “Information”. The services to which the Information relate are NOT FOR RETAIL CLIENTS - The information contained in the Website is solely intended for professional investors, defined as investors which (1) qualify as professional clients within the meaning of the Markets in Financial Instruments Directive (MiFID), (2) have requested to be treated as professional clients within the meaning of the MiFID or (3) are authorized to receive such information under any other applicable laws and must not be relied or acted upon by any other persons. This Information does not constitute an offer to sell, or a solicitation of an offer to buy, any financial product, and may not be relied upon in connection with the purchase or sale of any financial product. You are cautioned against using this Information as the basis for making a decision to purchase any financial product. To the extent that you rely on the Information in connection with any investment decision, you do so at your own risk. The Information does not purport to be complete on any topic addressed. The Information may contain data or analysis prepared by third parties and no representation or warranty about the accuracy of such data or analysis is provided.

In all cases where historical performance is presented, please note that past performance is not a reliable indicator of future results and should not be relied upon as the basis for making an investment decision. Investors may not get back the amount originally invested. Neither Robeco Institutional Asset Management B.V. nor any of its affiliates guarantees the performance or the future returns of any investments. If the currency in which the past performance is displayed differs from the currency of the country in which you reside, then you should be aware that due to exchange rate fluctuations the performance shown may increase or decrease if converted into your local currency. Robeco Institutional Asset Management B.V. (“Robeco”) expressly prohibits any redistribution of the Information without the prior written consent of Robeco. The Information is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use is contrary to law, rule or regulation. Certain information contained in the Information includes calculations or figures that have been prepared internally and have not been audited or verified by a third party. Use of different methods for preparing, calculating or presenting information may lead to different results. Robeco Institutional Asset Management B.V. is authorised as a manager of UCITS and AIFs by the Netherlands Authority for the Financial Markets and subject to limited regulation in the UK by the Financial Conduct Authority. Details about the extent of our regulation by the Financial Conduct Authority are available from us on request.