M&G is backing two companies at the forefront of carbon capture and storage technology, in line with the firm’s ambition to achieve net zero carbon emissions across its entire investment portfolio by 2050.
Carbon capture capacity is set to play a critical role in offsetting emissions which contribute to global warming while industrial sectors gradually decarbonise over the next decades. It offers the potential for stable income streams for investors, as well as helping limit global warming.
It is a market M&G expects to reach EUR 10 billion by 2030.
The two investments have been made through the £143 billion Prudential With-Profits Fund on behalf of over 5 million policyholders.
The first investment is in Storegga Geotechnologies (Storegga), an independent UK company pioneering carbon reduction and removal projects.
It is the lead developer of the Acorn Carbon Capture and Storage and Hydrogen Project (Project Acorn) in North East Scotland. Project Acorn will capture carbon dioxide from Scottish industrial operations and - using existing offshore pipelines – will store it in secure geological storage under the sea bed.
The investment, which is expected to boost jobs and develop new skills in the region, was made by M&G’s Catalyst team, who are investing up to £5 billion into privately-owned innovative enterprises working to create a more sustainable world.
The second investment, by M&G’s Alternatives team through an external partner, is in Summit Carbon Solutions, a company which aims to dramatically lower the carbon footprint of ethanol biorefineries and other industrial emitters throughout the Midwestern United States.
The company plans to install carbon capture equipment at industrial facilities, develop a pipeline network to aggregate and transport CO2 to sequestration sites and drill and operate injection wells.
Once fully developed, M&G believes the company’s infrastructure network should be capable of capturing and permanently storing more than 10 million tons of CO2 annually – the equivalent of taking 2 million cars off the road per year.
Jack Daniels, chief investment officer at M&G said: “Carbon capture and storage is emerging as a responsible and pragmatic solution in the effort to arrest global warming. As sustainable investors with patient capital, we are able to support these projects through their development phases until they become fully operational. 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.”
