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Capture a Great Investment, Choose Carbon Capture

By Mark Skeels


If you're an investor who has never heard of carbon capture before, you've come to the right place. This new technology involves withdrawing carbon dioxide from the atmosphere and keeping it stored before it is converted into a substance that can be beneficial to the farming, power and construction industries. Plenty of methods are being trialled so this technology can prevent climate change, including using the leftovers from producing steel to convert CO2 in this way.

Here in the United Kingdom, 1billion in investment has been put aside for carbon capture, with emphasis on how CO2 can be converted into liquid form before being stored in the North Sea in depleted oil reservoirs before processing. The line of inquiry in other countries, including the States, Germany and Australia is different, as their governmental money aims to explore uses for this converted gas.

We are making good progress, however. A university in the north of England has built specialist catalysts which transform any captured carbon into lucrative cyclic carbonates. Their studies suggest that an industrial-sized plant using these techniques to make the most out of carbon capture could yield a multi-billion pound industry, with the plant making profit by 2014 and over 1.4 billion in returns to the economy by 2017.

Dealing with carbon emissions is something that the world has slowly taken on board as the reality has started to hit home about the damage to the planet they are causing. The biggest international scheme to deal with the issue is the EU ETS (European Union's Emissions Trading System) which covers 11,000 industrial plants and power stations across 30 countries.

Every site in the EU ETS' remit has had restrictions on CO2 output levied. However, there is flexibility. If they fall under their allowance, they can sell the difference to another company, for example. Alternatively, if they fall short, they can buy carbon credits to ensure that they are not heavily fined for breaching the EU ETS restrictions. There is also the option for excess carbon credits to roll over annually to be sold at a later date.

The EU ETS scheme has just celebrated its seventh anniversary, and every year the CO2 limits for the companies they oversee have been cut gradually. As carbon dioxide emissions become less of a by-product from the industry, it is hoped that the levels of CO2 will be 80% of the levels when the initiative started.

Meanwhile, it's also possible for businesses to earn additional carbon credits should they make concerted efforts to be greener. As an investor, this means that spending up to 5,000 purchasing carbon credits (and placing them aside for a year and a half), could allow you to sell them on at a higher price - with a profit of 1,500 in just 18 months.

Next year, the Emissions Trading System in Europe are going to allow for carbon credits to be auctioned to businesses, which could increase their cost and create buoyancy in pricing. Now, as this scheme is replicated around the world, in addition to other nations investigating the merits of carbon capture, now is the time to invest the green economy.




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