Carbon capture and storage (CCS) is one of the technologies which could remove carbon dioxide emissions immediately from the atmosphere. Carbon capture stocks are incredibly pertinent considering how coal-fired power stations continue to play a major role in the energy sector.
With multiple world governments looking to produce 100% carbon-free electricity, carbon capture stocks can prove to be highly lucrative investments down the road.
CCS involves capturing carbon dioxide from various processes and using it as a resource or storing it deep underground. Typically, the carbon is captured from large point sources, including fuel combustion, chemical plants, and other industries.
The market is expected to grow from $2 billion to a whopping $7 billion by 2028, representing 19.5% growth. Moreover, the top two economies in China and the U.S. target peak emissions before 2030.
Having said that, let’s look at some of the most promising carbon capture stocks in the market.
Carbon Capture Stocks To Buy: Aker Carbon Capture ASA (AKCCF)
Aker Carbon Capture is a carbon capture pure-play with its mission in “enabling emission-free industries and energy solutions through carbon capture.”
The firm spun off from Aker Solutions, a leading energy services enterprise, both of which are part of the Norwegian industrial giant Aker Group, which trades on the Oslo Stock Exchange. Aker Horizons, a “planet-positive” investment firm, owns a majority stake in ACC and provides core project finances to produce ACC’s products.
The company has two main products, including the Big Catch and Just Catch. The Big Catch can capture over 400,000 tons of carbon dioxide per year, while the Just Catch has a capacity of 40,000 to 100,000 tons per year.
ACC focuses on the lucrative northern European market but will soon expand to the North American region. Moreover, the company has identified over 700 emitters across Europe. Additionally, it plans to secure contracts covering 10 million tons per year by 2025.
Equinor ASA (EQNR)
Norwegian oil giant Equinor is one of the oldest CCS specialists globally. It has stakes in over 30 CCS projects, including the Norwegian government’s Northern Lights project, which boasts a storage capacity of 1.5 million tons of carbon dioxide per year.
Moreover, it has been quickly developing its renewables portfolio. It generated 304 GWh of wind energy worth over $100 million in annual electricity rates during the third quarter.
The oil and gas giant has consistently built its assets in the past decade and brought new ones online. Its operating performance metrics are firmly in the green, with double-digit growth across its top and bottom line in the past year. Year-to-date cash flows are at an incredible $16.4 billion.
Moreover, despite the impressive performance, EQNR stock trades at just one time forward sales.
Carbon Capture Stocks To Buy: Occidental Petroleum (OXY)
Occidental Petroleum is one of the biggest shale players in the North American region. Similar to its peers in the oil and gas sector, it’s looking to progress towards a clean energy future. In doing so, Occidental has become one of the most promising players in carbon capture.
The company is looking to address carbon-related issues through various themes. First, it looks to reduce direct carbon dioxide emissions from its operations. Moreover, it plans to capture and retire more carbon than what’s being created by its products. In the future, technology could perhaps play a major role in cleaning up emissions from the past.
The other element to consider is that its debt is roughly $30 million, whereas its cash flows have a run rate of $12 billion. In that case, the $30 billion of debt remains relatively high, one of the key concerns for its management. The debt reduction process will be imperative in determining the future of its stock price.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
