Equity requires a long-term view of carbon capture – Aniruddha Sharma
Carbon capture technology is one of them. For example, the next generation of Carbon Clean’s carbon capture technology, which is expected to accelerate the adoption of carbon capture globally, is currently under development in Scotland. We are demonstrating this revolutionary modular technology at the Doosan Babcock Emissions Reduction Testing Facility in Renfrew. We also provide upstream engineering design services for the Acorn project at the St Fergus Gas Terminal, one of the most mature Carbon Capture and Storage (CCS) and Hydrogen projects in the UK. This project alone is expected to eliminate at least half of the CO2 emissions set out in the UK government’s ten-point plan for a green industrial revolution by 2030.
Scotland could in fact become a world leader in CCS technology, with clear economic benefits including a multibillion dollar market share; current IEA projections consider the market opportunity to exceed $ 1 trillion.
The Acorn Project, and similar projects, are important catalysts for clean growth, helping to transform previously carbon-intensive industries and maintain jobs. A recent report from Element Energy estimated that an average of 15,100 jobs could be supported between 2022 and 2050 by the Scottish Cluster – a cross-sectoral group of companies providing CCS, hydrogen and other low-energy technologies. carbon emissions (including the Acorn project) to help Scotland, UK and Europe meet net zero targets.
But engineering excellence is not enough for Scotland to capture its place as a world leader. Capital matters as much as technology. Financial leadership will be a powerful catalyst for the future growth of our industry. However, we need financial institutions to be prepared to take informed risks, in recognition of the huge opportunity that decarbonization represents.
UK equity markets have a long history of undervaluing technology assets: prioritizing quarterly financial performance over long-term opportunities. Long-only fund managers, based in Scotland and the rest of the UK, will need to develop models that reflect the potential of cleantech. It will be a challenge, given the pace of change in the sector, but the COP26 in Glasgow will play a key role. Concrete emission reduction commitments by 2030 will help lay the foundation for assessment models that capture the potential of CCS and other emerging technologies.
Reforms to increase the availability of capital for industrial decarbonization technology will also be needed to ensure that founders and investors have access to a wide range of financing tools to support investment and international growth. The UK Climate Change Committee’s finance advisory group estimates that net zero investment needs to rise from around £ 10bn per year today to £ 50bn in 2030, before peaking in 2035. Government has a role to play here – policy uncertainty increases the cost of capital – but it will be up to fund managers and alternative asset firms in the UK to recognize the opportunities presented by the global green investment.
The work of bodies such as the Climate Financial Risk Forum, co-chaired by the Financial Conduct Authority and the Prudential Regulation Authority, will be essential in creating a culture of cleantech investment in the UK. But savers also have a role to play. It is now common practice for consumers to make retirement decisions based on the ESG credentials of fund managers. But we will need to provide savers with the information they need to exert positive pressure on investors to support clean technology. The full might of global capital will be needed to drive this green industrial revolution.
As Scotland prepares for COP26, it can be proud of its achievements so far and prepare to strengthen its position as a cleantech leader.
Aniruddha Sharma is co-founder and CEO of Carbon Clean