M&G hails ‘responsible and pragmatic’ carbon capture investments

The UK-based investment heavyweight sees carbon capture as the best way to decarbonise industrial companies.

Catalyst, a dedicated impact unit that sits within the £67.2 billion ($91.6 billion; €77.8 billion) M&G private and alternative assets team, has invested in carbon capture and storage company Storegga Geotechnologies. The company is the lead developer of Project Acorn, a carbon capture and storage project in northeastern Scotland that uses existing offshore pipelines to store carbon dioxide in what M&G describes as “secure geological storage” under the seabed. Financial details were not disclosed.

M&G says that by 2030, Project Acorn has the potential to deliver more than half of the 10 million tonnes per year of carbon storage targeted by the UK government in its 10-point Green Industrial Revolution plan.

M&G’s alternatives team is also exposed to carbon capture through an LP commitment to Tiger Infrastructure Partners. In April, Tiger invested in Summit Carbon Solutions, a newly created business that aims, in M&G’s words, to “dramatically lower the carbon footprint of ethanol biorefineries and other industrial emitters” throughout the US Midwest. Summit aims to be operational in 2024 and claims it will be the largest carbon capture project in the world, capable of permanently storing approximately 10 million tonnes of carbon dioxide annually.

“Carbon capture and storage is emerging as a responsible and pragmatic solution in the effort to arrest global warming,” said Jack Daniels, chief investment officer of M&G. “When complete, these projects are likely to play a significant role in lowering the carbon footprint of industrial companies, as decarbonising their activities is expected to take longer, which is an important tool in the mix for tackling climate change.”

Carbon capture and storage has only recently emerged as a credible, investable tool in the fight against climate change. In 2015 the UK cancelled a £1 billion CCS scheme. A similar initiative is now back underway. The US government now provides subsidies and tax incentives for carbon capture and storage.

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