Everything carbon investors really need to know about carbon capture, use and storage (CCUS)

Carbon capture, use and storage (CCUS) involves catching concentrated industrial emissions at their source, preventing them from entering the atmosphere.

CCUS has been seen as controversial, particularly by environmentalists who see it as a get-out-of-jail-free-card enabling fossil fuel producers and consumers to carry on extracting coal, gas and oil and burning it, much the same way they have done for decades.

The ‘U’ component of CCUS can mean that the CO2 is used as a feedstock for another industrial process. Depending on the actual use it may lock the CO2 up for a considerable period. The ‘S’ component of CCUS may involve permanently storing the carbon dioxide deep underground where it will mineralise, i.e. turn into rock.

CCUS is one of many tools that power generators and industrial plants have to accelerate decarbonisation. As climate science suggests we are moving ever closer to a point where emissions must peak and start to decline, expect policymakers to push CCS as a tool to cut emissions.

The evolution of CCS will have important implications for carbon market investors, but it will also throw up opportunities for investors to direct capital to where it is needed.