The Top 3 Carbon Capture Stocks: How To Invest in Removing Carbon From the Air
Although carbon capture technology is in its early stages, extracting CO2 from the air may be what we need to fight climate change. Is there a way to invest?
Anna Ng Updated January 27th, 2022
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What is carbon capture?
Carbon capture includes capturing and storing carbon from industrial processes (carbon capture and storage), removing CO2 from the air using giant fans (direct air capture), or planting trees to store carbon.
Carbon capture and storage (CCS)
Carbon capture and storage (CCS) has been around since the 1970s, though it’s not widely deployed. CCS can capture CO2 from emitters like power stations, refineries, cement, and steel plants. Once carbon is captured, it can be stored underground.
Though CCS is sometimes criticized because it mitigates emissions without eliminating them, proponents say that the world will still need fossil fuels for some time. Besides, industries like cement-making are extremely difficult to decarbonize, and CCS is better than nothing.
Direct air capture
To address climate change, reducing emissions from polluting activities like burning fossil fuels may not be enough. We may need to actually remove carbon dioxide that’s already in the atmosphere.
Direct air capture involves setting up giant fans that vacuum carbon from the air. Fans can be powered with renewables and carbon stored underground. Climeworks, the best-known carbon capture startup, even lets you pay to remove carbon from the air to offset your own carbon emissions. Although the technology is extremely expensive and needs a lot of power, it lets us quantify exactly how much carbon is removed.
🔔 Learn if you should pay Climeworks to offset your emissions.
Finally, planting trees is another way of capturing and storing carbon. Although there are many initiatives to plant trees to remove CO2 from the air, tree-planting has many critics, too. They are concerned about the lack of land to plant so many trees, the risk that forests burn down, or that logging simply shifts from one area to another.
Can you invest in carbon capture?
Carbon capture and storage is dominated by big oil and gas companies like Shell, Chevron, Total, Equinor, and Occidental Petroleum. Exxon Mobil is storing 9 million tons of carbon per year and plans to invest billions in CCS facilities. Occidental Petroleum plans to sell its CCS services to others. Yet oil company profits come from refining oil, not from capturing carbon. So oil stocks are not good carbon capture stocks.
However, there are two publicly traded companies that sell carbon capture technologies, Aker Carbon Capture and Delta Cleantech. You can also invest in voluntary carbon credits through Carbon Streaming Corp or in carbon credit futures through an ETF like KRBN.
Unfortunately, there is no way to invest in direct air capture. Companies like Climeworks or Carbon Engineering are not publicly traded on stock exchanges. Instead, they are funded by philanthropists like Bill Gates and venture capital investors.
Carbon capture stock list
- Aker Carbon Capture ASA (AKCCF)
- Carbon Streaming Corp (OFSTF)
- Delta Cleantech Inc (DCTIF)
However, carbon capture technology is not widely deployed and these stocks are very speculative. Don’t invest more than you can afford to lose.
Read more about each company:
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1. Aker Carbon Capture ASA (AKCCF)
- Market capitalization: $1.26 billion
Norway’s Aker Carbon Capture is a pure-play carbon capture company that makes carbon capture plants. Unlike Climeworks, Aker focuses on industrial processes, not on sucking carbon out from the air. And it targets polluting companies, not individuals.
Aker sells to commercial customers that need to capture carbon, such as the cement industry. Aker has offered its technology commercially since 2005. The carbon capture process uses water and solvents to absorb carbon from emissions. It can be applied to various types of emissions, including emissions from gas, coal, cement, and refineries.
The company’s Brevik carbon capture and storage (CCS) plant is the world’s first industrial-scale carbon capture plant at a cement factory. Aker has also signed a contract with Twence, a waste-to-energy company, to remove carbon from a Dutch waste-to-energy facility.
Despite its promise, Aker’s stock remains very speculative. Its market capitalization is over $1.2 billion, yet the company generated only NOK 101 million (roughly $11 million) in sales in the third quarter, mostly from the Brevik CCS project. (Though that is three times as much revenue as for the entire 2020.) Still, Aker hasn’t had problems raising capital. The company wants to be a leader in the nascent carbon capture and storage industry, which is poised to see a lot of growth.
2. Carbon Streaming Corp (OFSTF)
- Market capitalization: $260 million
Carbon Streaming Co applies a different model to carbon capture. The company invests in carbon offset projects around the world. Most of these projects involve planting trees, which remove carbon from the air. Project owners receive carbon credits which they can then sell. Although there is some debate about how effective tree planting is, the voluntary carbon credit market is growing rapidly.
Carbon Streaming can sell its carbon credits to companies that have pledged to “offset” their emissions to get to net-zero. Many have committed to being carbon-neutral by 2030 or 2050, and some, like Microsoft, have even pledged to be carbon-negative.
The Carbon Streaming portfolio of carbon offset projects includes the following investments:
- Rimba Raya is a REDD+-certified project protecting swamp forests in Borneo, Indonesia. Over its 30-year life, the project should reduce or avoid emissions of 130 million tons of CO2. Rimba Raya has been generating carbon credits for over a decade
- The MarVivo Blue Carbon Project protects mangroves and marine life in Baja California Sur, Mexico
- The Bonobo Peace Forest Project will mitigate deforestation in the Democratic Republic of Congo
- The Cerrado Biome Project is a grassland conservation project in Brazil
It takes some time before new projects start generating carbon credits, but the market for voluntary carbon credits has been on fire.
Canada-based Carbon Streaming Corp went public on the Toronto Stock Exchange in 2021 and has over $250 million in market cap.
🔔 Learn more about Carbon Streaming Corp.
3. Delta Cleantech Inc (DCTIF)
- Market capitalization: 22 million CAD
Delta Cleantech is a Canadian carbon capture technology stock. The company has developed a CO2 capture system designed to reduce the cost of carbon capture. The technology can work with coal-fired power plants, cement plants, refineries, and diesel generators. Delta Cleantech is trying to expand into the Chinese market and generate and sell voluntary carbon credits, too.
The stock is very speculative, with only 375,000 CAD in 3Q 2021 revenue and 22 million CAD in market cap.
NOT INVESTMENT ADVICE. The content is for informational purposes only; you should not construe any such information as investment advice.
🔔 Looking for other carbon investments? Learn about investing in carbon credits.