Carbon Capture Technology Stocks vs Carbon Offset Stocks (Stats)

Over the past few years, financial markets have been expanding into green territory, but when you’re considering investments, knowing the differences between carbon capture technology stocks vs carbon offset stocks can impact your decision.

The main difference between the two stock options is how they impact the planet. Both are excellent tools that can help lower the overall emissions generated by industry, but knowing which ones will deliver the most return (both for your wallet and the environment), requires knowledge of the stats and how these two stocks are performing.

So, what is the difference between carbon capture technology stocks vs carbon offset stocks?

What Are Carbon Capture Technology Stocks?

Carbon capture is among the few innovations that can instantly halt the releases coming out of flue or get rid of carbon dioxide from the atmosphere. For us to limit global warming to 1.5 degrees Centigrade, the process of eliminating carbon dioxide is essential.

Hence, carbon capture and storage (CSS) technology stocks are becoming popular with investors.

Several roadblocks prevent the widespread adoption of renewable energy, including a lack of readily available power, the need for additional time and resources to create the needed capacity to meet world energy demands, problems with power quality, transmission hurdles, and high costs.

Green hydrogen is still in its infancy, meaning it will take many years before the sector is fully established. Since the clean energy shift is not occurring immediately, the world urgently needs a device that can prohibit carbon releases from fossil-fuel facilities from penetrating the atmosphere.

The carbon dioxide reduction has been operational for a while now. Since the 1920s, the plant has been deployed in the process of extracting the potentially marketable methane gas from carbon dioxide found within gas reserves. Towards the end of the 20th century, a carbon dioxide stream was extracted from a plant in Texas. It was utilized to increase the amount of oil extracted from the earth.

Enhanced oil recovery is the name given to this method, which has been demonstrated to be effective. Since then, many oil corporations have been deploying carbon dioxide capture technologies to increase oil production.⁵ An entirely new approach to carbon capture was presented in 1996, and it profoundly impacted the industry.

How Carbon Capture Works

Equinor prides itself as the first company to apply the pre-existing technology in a novel way, sequestering the underground carbon dioxide. To reduce Norway’s overall releases by 3 percent during the last two decades, it constructed and implemented the first-of-its-kind carbon capture technology plant in the planet’s history.

Many issues hinder the technology for capturing and storing carbon. There are presently few methods for investors to benefit from this technology; therefore, it’s still in its early stages of acceptance. Ruling regimes throughout the globe are providing grants to help offset the enormous initial costs of implementing the technology. Still, if carbon capture technology stocks are to develop, they must deliver returns to stakeholders.

Unfortunately, there aren’t any carbon capture technology stocks that are 100% pure at this time. Many of the firms solely dedicated to commercializing carbon capture technologies are privately owned corporations.

Direct air capture firms like Climeworks and Carbon Engineering and carbon capture service providers like Svante and Recapture are just a few examples.³ Since the globe wants to achieve a net zero emission by 2050, pressure is drastically piling on fossil fuel companies to slash emissions.

Carbon Capture Stocks: NASDAQ

It is possible to minimize carbon dioxide emissions by putting resources into carbon capture equipment, which may also provide income for your investment portfolio.

(Image: sergeitokmakov⁶)

Delta Cleantech and Aker Carbon Capture ASA are two excellent carbon capture companies to look into on the NASDAQ. These shares are selling for less than $10, but analysts predict they will grow.

Carbon Capture: Penny Stocks

Carbon capture is the focus of roughly 1,000 or more firms, with many others anticipated to enter the fray soon. Despite this, there are just a few carbon-capture-focused equities that you may currently buy.

Occidental Petroleum and Aker Carbon Capture ASA are among the top carbon capture penny stocks currently available for investment.¹

What Is the Best Carbon Capture ETF to Buy 2022?

With an exchange-traded fund (ETF), there are a few more options for investors.

Climeworks Carbon Capture Stock

Climeworks developed its first facility in Hinwil, Switzerland, in 2017, after perfecting the carbon elimination technique in the laboratory for close to ten years.

During that period, Climeworks was selling the CO₂ it had collected to clients such as farmers to deploy as fertilizer as well as the soft drink manufacturer Coca-Cola. These first niche uses were pertinent to the climate but served as a demo of the innovation itself. When people and companies became more worried regarding climate change, the firm started to notice a market for its products years later.

When Climeworks launched its carbon offset program in 2018, it allowed customers to pay a monthly fee ranging between $36 and $120 to offset their carbon emissions. As of this writing, about 14,000 individuals have volunteered.

Some large corporations are partnering with Climeworks to show their environmental stewardship. And using basalt rock mineralization, Climeworks is now primarily collecting carbon from the atmosphere and keeping it below the earth.

Climate goals—the ability to offer a good as either carbon negative or carbon neutral—are becoming more critical to businesses. Firms are responding to this trend by increasing the need for carbon exclusion. They are incorporating the information that they’re eradicating carbon dioxide from the environment into the goods and services they provide to their present clients.

Climeworks is presently a privately owned corporation; hence it is not accessible to the general public. It’s unclear if the firm aims to go public at some point. Even so, many publicly listed firms are involved in the carbon capture industry.

Aker Carbon Capture Stock

Within this list, Aker Carbon Capture is potentially the best example of “carbon capture technology stocks.” Aker ASA has been developing and implementing cutting-edge carbon capture technologies and operating facilities for roughly two decades. In late 2020, Aker Carbon Capture was founded as an Aker Horizon division.

Aker Horizons is an organization that invests in clean technology startups that address critical environmental issues. Aker Horizons own Aker Carbon Capture to the tune of 51 percent. And it’s only Aker that is focused on deploying carbon capture technology for its clients. However, the firm is yet to become money-making as it recorded a net loss of about $8.5 million within the first half year. Carbon capture equities generally face substantial threats due to an unreliable market, but the long-term prognosis seems good.

However, the sector and the business are supported by solid foundations that indicate a promising future. The present leanings suggest that the cost of generating carbon is increasing significantly. In contrast, the cost of collecting carbon discharges has decreased over the previous several years due to greater utilization.

Global CCS Institute’s latest analysis shows that the anticipated volume for carbon capture technology climbed rapidly to 111 million tons annually by September and increased by 52 percent over the previous several months. Compared to the 40 million tons annual volume of already running tasks.

Norway, Belgium, Sweden, Denmark, United Kingdom, Iceland, Finland, Netherlands, and Luxembourg are the firm’s primary markets, aligning with the organization’s stated goals. In addition, UK’s ruling regime has pledged $1 billion to construct four CCS centers in the nation. CCS and Aker, the two companies, highly mentioned when the carbon capture technology stocks vs carbon offset stocks are brought up, are poised to take advantage of this capital infusion.

However, how long would CCS need government subsidies if it is ever to reach commercial scale? These are the essential questions. According to Aker’s half-year fiscal report, a crucial tactical pillar for the enterprise’s finances reveals that the price of CCS will match the successful carbon cost in several years.

Investments in additional capacity are required to get to the intersection point. According to the International Energy Agency (IEA), in 2030, CCS volume will grow to 310 million tons annually. A recent study shows that the CCS industry is expected to increase by a compound annual growth rate of 19.2 percent.

Nevertheless, according to other estimates, reducing global warming to 1.5 degrees Celsius would require removing at least a gigaton of carbon released from the atmosphere by the first quarter of the 21st century. And to realize IPCC’s goal of roughly seven gigatons of carbon dioxide storage volume annually by 2050, capacity has to grow exponentially.

Because Aker Carbon Capture operates in an industry that is anticipated to see exponential growth over the coming several decades, and as it is also situated in a nation that has made a lot of investments in green energy, the company appears to be the best one to invest in.

Aker is publicly available. Bearing that Aker is among the most promising firms, you should purchase some stocks concentrating on the whole process.

Carbon Engineering Stock

Carbon Engineering is a supplier of sustainable energy services that aims to supply inexpensive and dependable electricity while simultaneously lowering carbon emissions. The firm’s services deploy direct air capture know-how, which traps CO₂ straight from the atmosphere, so it’s perpetually kept beneath the ground or converted into fuel.

Being a privately held company, Carbon Engineering’s shares cannot yet be purchased on the open markets.

BioCarbon Engineering Stock

Lauren Fletcher came up with the concept of BioCarbon Engineering, currently known as Dendra Systems, whilst attending COP15. To him, the situation of our planet is very concerning: climate change and the disappearance of natural habitats. Fletcher thinks that, when effectively utilized, new technologies may tackle global-scale challenges in previously impossible methods. He founded the firm legally in 2013.

BioCarbon Engineering is a privately held company; hence it is currently inaccessible to the general public.

Carbon Capture Stocks CEI

Carbon capture technology is becoming a worthwhile venture with greater attention to climate change. It’s a great time to put your money in Camber Energy Inc. (CEI) since it has a unique blend of fossil fuel assets and specialized energy solutions for business and industry. Besides funding carbon capture technology tasks, the firm runs oil and gas holdings where it may use its sustainable energy technology in the production process. There is a lack of consistency in the stock earnings, though.

Occidental Carbon Capture Stock

Among the largest gas companies in Texas, Occidental Petroleum Corporation is ranked seventh in the nation. Since it’s also famous for being an oil firm heavily concerned with climate change, it was wise to include it in this list of carbon capture stocks.

Aside from its desire to maximize shareholder profits, the corporation has also shown interest in moving toward a low-carbon future. It’s one of the best bets for turning carbon capture into an enterprise.

Since it established Oxy Low Carbon Ventures (OLCV) in 2018, the company has been working to improve the efficiency of CCS while also creating new methods. One million tons of carbon dioxide annually is projected to be eliminated from the atmosphere when the plant is finished. OLCV deploys Carbon Engineering expertise and intends to make it available to other businesses as a solution.

Even if it’s an oil firm, Occidental is in an excellent position to benefit from future carbon capture and storage development plans. The share price of carbon capture technology has risen more than 60 percent since August, and it’s currently trading at USD 33.98. However, it’s not late to make a stock purchase because the company has the probability of beginning to dishing out dividends.

Equinor Stock

It’s among the few gas company that employs carbon capture technology. Equinor Stock is a pioneer CSS and operates the oldest carbon capture and storage firm globally. For roughly two decades, it has been improving the know-how.

A high in Equinor’s shares shows that the corporation is deriving all the good juices from Europe’s gas value spike.

Carbon Offset Stocks

How can you capitalize on carbon offsets stocks? Well, firms may get carbon offsets by reducing their carbon releases or purchasing surplus credits from other companies.⁴ By doing so, businesses can achieve their emissions objectives while simultaneously increasing the amount of carbon dioxide they produce.

Administrations may decide to decrease the availability of carbon credits to raise their prices. Carbon-intensive businesses will be forced to pay a higher price to compete. For those that vend credits, this will enable them to make even more money.

It’s impossible to purchase individual carbon offset stocks if you’re interested in investing in them. As a substitute, you may capitalize on exchange-traded funds (ETFs) that hold a variety of resources, such as futures contracts. Carbon offset exchange-traded funds right now:

KraneShares Global Carbon ETF

In 2020, KraneShares Global Carbon was considered the biggest carbon offset ETF, with about USD 1 billion in resources. Before taxes and assets, this product seeks to outperform the IHS Markit index by producing a total return above the index.

You should purchase these shares if you want to capitalize on carbon offset equities. Since its inception, KraneShares has doubled every invested dime since its launch. Even if carbon offset ETFs are still in their infancy, doubly seeing a return on your investment is always welcome news.

KraneShares California Carbon Allowance ETF

KraneShares also offers an exchange-traded fund (ETF) focused on carbon allowances called the KraneShares California Carbon Allowance ETF (KCCA).

Yet, unlike other ETFs, this one is concentrated on the Golden State. Similarly established in 2021, this fund has amassed about $200,000,000 in assets since its inception.

Should You Invest in Carbon Offset Stocks?

If you wish to invest in carbon offsets,² your best bet is to go with an ETF or ETN, which are the most common options. The price of carbon is reflected in the future contracts invested in these ventures. To put it another way, there is little link between their value and the value of stocks. As a result, if your collection is composed chiefly of equities and bonds, they may offer some diversity.

If we put the whole carbon capture technology stocks vs carbon offsets stocks and you desire to invest in the energy shift, carbon offsets might be a worthwhile option. Since carbon allowances are being pushed out, this will bolster the cost of these non-conventional assets. Because of this, they may be a good fit for a limited portion of your portfolio redd carbon credit price chart

California Carbon Credit Price Chart

Price of California Carbon Allowance Futures Over Time⁶

The California Cap and Trade Program was developed to realize affordable emissions cutbacks all through the capped sector.

The program allocates utmost, country-wide greenhouse gas (GHG) emissions for all laced industries annually, and permits covered units to sell off allowances. California Carbon prices are propelled by allowance trading.

EU Carbon Credit Price Chart

Price of CO2 in the EU Emissions Trading System⁸

In the last few years, Russia has implemented a supply cut of its natural gas pushing companies to shift into carbon-heavy coal, leading to greater releases and the need for permits.

REDD Carbon Credit Price Chart

Price of REDD+ Credits Rose in 2021⁷

The REDD+ Credits grew 280 percent between September 2020 and September 2021 as noted in Figure 3. And this is attributed to the fact that these credits are preferred by traders due to the co-benefits involved in the tasks.

Since you now have the bigger picture regarding the carbon capture technology stocks vs carbon offset stocks debate, you can become a part of the green finance movement.

Investors who are serious about making a difference may still make money by purchasing carbon capture technology stocks equities, while also helping to reduce the global environmental impact.

Information is not intended as actual financial advice but for entertainment purposes only. All investment strategies and investments involve risk of loss. Nothing contained in this website should be construed as investment advice.

Frequently Asked Questions About Carbon Capture Technology Stocks Vs Carbon Offset Stocks