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High Demand
May be one of the biggest industries ever built in our lifetime due to the overwhelming need for carbon removal in almost every other industry (660 billion tons in 10 years)
Investment Opportunity
Investors want to balance risks while taking advantage of the opportunities presented (high internal cost of carbon).
Backed by Experts
IPCC states carbon capture is necessary in the temperature overshoot scenario we are facing. This will help with residual emissions and reduce atmospheric concentrations.
Investments are pouring into carbon capture initiatives. Here are five reasons why:
A wave of investors see carbon capture as the only way to guarantee our future.
But will it put renewable energy investments in the past?
Funded by High Emitters
Greenhouse gas intensive industries are funding research into carbon capture technology to offset their existing technologies.
Evolving Legislation
The European Commission’s CCS Directive establishes a legal framework for “safe and effective geologic sequestration of CO2”. Adopted in 2009 in the EU, it is one of many industrial carbon management efforts by European legislators.
Unveiling the Carbon Capture Mirage: What are the Questions Left Underneath the Surface?
It presents a means for oil and gas companies to extend the fossil fuel era; companies like Exxon have opted to defund research into renewables in favor of carbon capture initiatives
Direct air capture is highly energy intensive and contributes to increase in CO2 emissions
Will carbon capture prove itself cost-effective and reliable at scale in the limited time available to course correct?
Discussion Question:
Promises of the billion tons of carbon mass to be captured through these technologies
Carbon capture as of now only address 0.1% of global emissions (WRI, 2023)
Unlike solar cells, carbon capture technology is difficult to mass produce as it is designed to match the facility that’s capturing the CO2.*
Quantifying Emission Data & Reduction Needed
To Limit Global Warming to 1.5°C…
Greenhouse gas emissions must peak by 2025 and decrease by 43% from 2019 levels by 2030.
Scope of Goal
In 2019, global GHG emissions reached…
51.7 gigatonnes of CO2 equivalent, marking a 0.6% increase from the previous year. The emissions were composed of 73% CO2, 18% CH4, 6% N2O, and 2.5% F-gases.
Current State
The top emitters were…
China (26.4%), the United States (12.5%), India (7.06%), and the European Union (7.03%). In the same year, the U.S. alone emitted 6,558 million metric tons of CO2 equivalent.
Main Sources
Appendix
Navigating ESG in non-financial institutions
🡪 ESG vs. Sustainability | ||
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| ESG Reporting | ESG Ratings |
| ‘Non-Financial Reporting’ | 'Opinions' |
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Who | Corporates | ESG Rating providers |
| | rates firms (Issuers) |
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Key regulations (EU) | CSRD EU Taxonomy | EU Regulation on Transparency and integrity of ESG rating activities (Nov-2024) |
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Purpose | Disclosure | Inputs for investors |
| | |
Common aim of the EU Taxonomy and ESG Ratings: |
| |
Materiality
a) Financial Materiality (# 'ESG Risks')
b) Double Materiality: Financial and Impact
Key concepts
ESG Rating providers and ESG based products
Status Quo | Catalyst | Stakeholder Pressure | Company Response | Regulatory Response and Innovation |
Issue financially immaterial | Issue still financially immaterial | Issue becoming financially material for some companies | First sign issue could become financially material for entire industry | Issue financially material for entire industry |
The dynamic nature of Financial Materiality
ESG rating: aggregated confusion
ESG Risks vs. Impact