Climeworks, based in Switzerland, operates Orca, the world's first commercial direct air capture facility. The plant eliminates carbon dioxide from the atmosphere indefinitely. (Climate change is mainly caused by carbon dioxide and other greenhouse gases such as methane.)
Climeworks is the first firm to provide direct-to-consumer offsets from direct air capture. You may use this method to offset your carbon footprint from driving, traveling, heating and cooling your house, and shopping online.
Climeworks' direct air carbon capture system is pulling CO2 out of the air to counteract climate change. You may join up to permanently remove carbon from the environment and offset some of your carbon impacts for as low as $36 per month. Learn about alternatives if you're more interested in Climeworks as an investment.
As of March 2022, over 13,000 people from 56 countries had signed up. Microsoft, Shopify, and the reinsurance firm Swiss Re are among Climeworks' corporate clients. Coldplay, the band, is a client.
Is it feasible to remove CO2 from the atmosphere?
Yes. Using big fans and chemical processes to separate CO2, direct air capture (DAC) technology allows us to collect carbon dioxide while releasing the rest of the air. According to many studies, to meet climate targets like those outlined in the Paris Agreement, we must cut emissions while also removing carbon that has already been emitted.
Carbon capture technology provides the following benefits:
CO2 is permanently removed. Many firms offer carbon offsets from forest preservation or landfill methane capture initiatives. However, these offsets may only be temporary. Forests may burn down, or loggers can chop them down. Carbon capture, on the other hand, provides long-term CO2 removal. The method can even eliminate carbon emissions from decades past since carbon lingers in the atmosphere.
CO2 elimination can be measured. It might be challenging to calculate offsets from efforts like forest preservation, and some have been questioned, such as offsets sold to rescue trees that would otherwise be taken down. On the other hand, carbon capture does not have a measurement difficulty.
Land utilization is efficient. Other carbon removal methods, such as planting trees, need a large amount of land, far more than a carbon capture facility. CO2 captured underground can be kept in the form of rocks.
Climeworks isn't the only company experimenting with direct air capture, and carbon Engineering is its biggest rival, despite not selling products to consumers.
What is Climeworks technology, and how does it work?
Climeworks creates direct air collection systems that resemble massive fans. The facilities use renewable energy or trash to generate electricity to be climate-neutral. The fans pull air into collectors, which use filter material to trap CO2. When the carbon collectors are complete, they are closed. The temperature of the collection units rises to roughly 100 degrees Celsius. CO2 is discharged into the atmosphere, combined with water, and then deposited underground, where it transforms into stone.
Other carbon storage alternatives exist. Climeworks has sold CO2 to Aether Diamonds for lab-grown diamonds and a Coca-Cola bottling facility in Switzerland. Climeworks, on the other hand, store carbon underground as rocks with Orca. Carbfix, an Icelandic firm, is assisting with underground storage. The advantage of storing carbon as a rock is that it remains there indefinitely. (Trees also store carbon, but they can burn, be felled, or succumb to natural causes.)
Orca has the ability to remove up to 4,000 tons of CO2 from the atmosphere per year. It's not much, but it's something. According to Cool Effect, the typical American generates 16.6 tons of CO2 per year, meaning that one Orca can only "offset" 240 Americans yearly. In addition, global carbon emissions are estimated to be over 50 billion tons each year.
Additional emissions can be caught when more facilities are installed. Building a direct air capture facility takes 1-2 years, according to Climeworks, and the system can last ten years. Planting a new forest as an alternate method of collecting carbon can take up to twenty years.
What does Climeworks set you back?
Climeworks provides three subscription options, all of which can be canceled anytime.
Explorer ($36 + VAT each month). The Explorer plan pays to permanently remove 30 kg of CO2 from the atmosphere every month ($60 + tax). Each month, the Discoverer plan funds the removal of 50 kg of CO2 from the environment.
Special adventure ($120 + tax each month). This scheme funds the removal of 100 kilograms of CO2 from the atmosphere each month.
Climeworks now offers the option of purchasing a subscription as a gift. You'll receive a yearly confirmation of how much carbon you've eliminated from the atmosphere if you subscribe.
Climeworks, on the other hand, is prohibitively expensive compared to other carbon offset initiatives that earn offsets by planting or conserving trees or absorbing methane from landfills. Before taxes, you'll pay $1,200 per metric ton. It will cost $19,920 to offset your emissions if they are typical for an American, say 16.6 tons per year.
Traditional offset providers such as Cool Effect and Terrapass, on the other hand, charge as little as $9.9 per ton or $164 per year to offset your emissions.
What are the disadvantages of direct air capture?
The cost of direct air capture is prohibitive.
Climeworks cost $1,200 per ton of carbon removed, as previously stated. So, using Climeworks to offset the cost of a flight from New York to Los Angeles, which emits 0.6 tons of CO2, will cost you $720, maybe more than the travel itself.
Offset providers such as Cool Effect and Terrapass charge just $9.9–11% per ton; thus, offsetting the same aircraft would cost less than $6. While the benefits of preventing deforestation are less certain, they are unquestionably more economical.
Bill Gates, according to reports, receives a special discount for large orders and pays Climeworks only $600 per ton. However, this is still significantly higher than the corporate market pricing for carbon offsets, ranging from $4 to $5 per ton.
Climeworks hopes to reduce the cost to $200-300 per ton by 2030, but that is a long way off and still prohibitively costly.
The capacity for direct air capture is quite restricted.
Because of its exorbitant cost, the technology is still in its early stages and hasn't been extensively embraced. Orca is the world's most extensive direct-air capture system. However, it can only catch 4,000 tons of CO2, a drop in yearly carbon emissions of 50 billion tons in the ocean.
Of course, wind and solar energy were originally prohibitively costly, but their prices have progressively decreased over time. In certain places, wind and solar power are now the cheapest sources of electricity. Direct air capture may follow that path.
Direct air capture facilities, which consume a lot of energy, require access to renewable energy.
Direct air collection needs a lot of energy, but it would be counterproductive to utilize fossil fuels to power it. While certain places, such as Iceland, have simple access to geothermal energy, this is not the case everywhere.
What is the location of Climeworks?
Climeworks is a Zurich-based firm, although its main carbon capture facility, Orca, is located in Iceland. (In Icelandic, Orca means "energy.") A geothermal power plant fuels the facility, and the carbon extracted is stored in surrounding rock formations.
Climeworks was started by who?
Christoph Gebald and Jan Wurzbacher started Climeworks. Both have PhDs in mechanical engineering from ETH Zürich, the Swiss institution where they met for the first time.
Climeworks is a private corporation, not a public one.
When does Climeworks plan to go public?
Climeworks has yet to make an IPO announcement. Instead, it is raising private funds. Climeworks raised around $138 million from investors such as the Swiss Entrepreneurs Foundation and the Zürcher Kantonal Bank, according to Crunchbase.
Is it possible for you to invest in Climeworks?
No. Climeworks is a privately held company that venture capital firms can only invest. There are, however, alternative publicly traded options:
Carbon Streaming Corp (OFSTF) Delta Cleantech Inc. Aker Carbon Capture ASA (AK (DCTIF)
Carbon Emissions Can Be Reduced by Investing in a Growing Industry
Carbon capture firms that are publicly traded range from start-ups to existing fossil fuel giants. Despite the fact that the industry is still in its infancy, market estimates show that carbon capture technology will grow rapidly in the next decades. This presents a chance for investors to help the energy transition while investing in a potentially lucrative business.
Investing in the finest carbon capture stocks for 2022 is a great strategy to diversify your portfolio while also putting money towards future technology. Given that many carbon capture enterprises are still in their infancy, pricing is reasonable but often variable. Carbon capture is a burgeoning energy business that will see rising acceptance worldwide, thanks to Europe's renewable energy efforts, the US' renewable portfolio standard, and global net-zero aspirations. A greater focus on renewable energy should be placed to combat global warming.
What is Carbon Capture and Storage?
Carbon capture is a technique for capturing carbon from the atmosphere and storing it permanently underground or using it in other sectors. Carbon dioxide is used as a raw resource in agricultural, chemical, and even architectural solutions to separate it from the atmosphere.
Despite its youth, the carbon capture sector has witnessed the development of 21 large-scale projects, with hundreds more in the works. Companies that excel at carbon capture and storage include:
With the advancement of technology, the profitable industry of carbon capture will increase in the following decades. The sector is propelled by several uses, government incentives, and worldwide demand for carbon credits. However, not all carbon capture companies are open to the public. Here are some of the best carbon capture stocks to watch in 2022:
Aker Carbon Capture (ACC.OL)
Aker, a Norwegian carbon capture firm, is open to the public. This is one of the most profitable businesses since it focuses on the entire process, from carbon collection and temporary storage to transportation, usage, and long-term storage. The business has been around for more than two decades. Although the carbon capture stock is relatively volatile, the Norwegian government's efforts to mitigate climate change make Aker Carbon Capture's future more secure.
EQUINOR (EQNR) is Europe's second-largest natural gas producer, with substantial cash on hand. Equinor is a newcomer to the carbon capture sector, with a presence in 30 countries thus far. This stock may be a superior investment for value investors, especially in the long run. A dividend is also paid on this stock. However, at 1.46 percent, it isn't the most appealing option. A low dividend yield, on the other hand, may indicate that the firm is reinvesting more in growth.
Delta CleanTech is a company that specializes in clean technology (DELT)
Delta CleanTech is one of the first carbon capture firms to go public. It was founded in the 2000s and focuses on CO2 capture, use, hydrogen generation, and ethanol purification. Through worldwide initiatives, this Canadian corporation is increasing revenues. It plans to create offices in London, Beijing, Sydney, and Houston shortly. It is a mature choice in a relatively new business due to its long duration in the market, risk diversification through various ways to use the captured CO2, and expertise with international CO2 capture projects over the previous 15 years.
Carbon Capture Stocks from Other Sources
There are many more public carbon capture firms than these three. Most of them have offices in Canada, the United States, and the United Kingdom. Pond Technologies Holdings (POND), Advantage Energy (AAV), Schlumberger (SLB), and Occidental Petroleum (OPC) are some of the other publicly listed carbon capture firms (OXY)
Why Should You Buy Carbon Capture Stock?
It's understandable to be skeptical about carbon capture stocks: It is not a viable business strategy to store anything underground. Furthermore, carbon capture enterprises rely heavily on government subsidies and operate in an unfriendly political environment. On the other hand, the carbon capture market will grow in tandem with the carbon credit market.
Carbon Capture Technology Companies and Stocks in the Future
The captured carbon is employed in manufacturing synthetic fuels, algae farms (for biofuel and kerosene production), and greenhouses. It's also used in the field of improved oil recovery.
Furthermore, CO2-derived sand and gravel can potentially reduce CO2 emissions from concrete manufacturing, which is one of the most significant CO2 emitters. The market is profitable; by 2050, it is predicted to reach USD 4 trillion.
As international pressure to cut or offset CO2 emissions grows, a new age of symbiotic collaboration between businesses is emerging. Source-capture, also known as point-of-emissions capture, is a promising area that permits enormous amounts of CO2 to be captured from power plants and heating facilities. Consequently, their emissions are successfully reduced, and raw materials for carbon capture technology firms are readily available.
Final Points to Consider – What Should Carbon Capture Investors Do?
The carbon capture and storage (CCS) or carbon capture and utilization (CCU) sector is rapidly modernizing, even though it is still in its early stages. The presence of significant participants in the area (Exxon Mobil, Chevron, and Shell) indicates a desire to decarbonize carbon-intensive businesses.
As a result, carbon capture stocks are expected to rise, particularly as the industry matures, and the energy shift becomes a reality.
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