The investing ecosystem for decarbonizing the global economy includes solar, wind, nuclear and hydro power generation; natural gas as a bridge fuel while oil and coal are phased out; and technologies that use or bury carbon dioxide.
That latter bit is often referred to as carbon capture, utilization and storage (CCUS) or, less broadly, carbon capture and storage (CCS). The processes allow carbon produced during industrial activities to be repurposed or sold. What isn’t reused or sold can be pumped into underground rock formations filled with salty water for permanent storage.
To some degree, the oil and gas industry supports carbon capture, and large companies such as TotalEnergies SE (ticker: TTE) and Occidental Petroleum Corp. (OXY) have delved into the technology. Critics say it delays the transition away from coal, oil and natural gas, creates its own set of environmental problems and isn’t as proven as solar and wind farms.
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Nevertheless, many hope that carbon capture will become part of the global transition away from fossil fuels.
“The industry is clearly shifting from experimental pilot stages to full commercial deployment,” says Sid Masson, CEO of Wokelo AI, an artificial intelligence research and due diligence platform. “Companies once focused on R&D are now building and scaling real projects.”
Meanwhile, demand is growing from hard-to-abate sectors, including heavy industry, which are under pressure to decarbonize and increasingly see carbon capture as one of the most viable solutions, he says.
He cautions, however, that risks remain, as many players are in the early stages and have posted negative earnings, meaning they will likely require additional funding.
Cost overruns are a concern with capital-intensive projects, and delays related to permitting, regulation or site-specific conditions can affect timelines and scale, he says.
“Still, the momentum, policy environment and technological readiness make this one of the most promising areas of the energy transition today,” he says.
Bruce Kahn, portfolio manager with Shelton Capital Management, says that despite uncertainty in energy markets and global politics, companies continue to deploy capital into carbon capture projects.
“While net zero goals by 2050 may seem lofty, the money trail is leading to more advanced CCS as a component of the solution to decarbonizing our economy,” Kahn says. “Coupled with the other energy transition topics, capital is catalyzing around decarbonization and sustainable development.”
Firms across many sectors are contributing to portions of the carbon capture industry, with the oil and gas majors and industrial gas and chemical companies the most involved, Kahn says.
There are only a few pure-play public companies, Kahn explains. Investing in pure-play industrial carbon capture companies is mostly done in private markets. But that doesn’t mean everyday investors are completely shut out from getting exposure to carbon-related investments.
Here are seven carbon capture investments to consider:
| Investment | Type |
| Aker Carbon Capture ASA (OTC: AKCCF) | Carbon capture |
| NET Power Inc. (NPWR) | Carbon technology |
| LanzaTech Global Inc. (LNZA) | Carbon technology |
| Pond Technologies Holdings Inc. (OTC: PNDHF) | Carbon technology |
| CF Industries Holdings Inc. (CF) | Carbon capture |
| KraneShares Global Carbon ETF (KRBN) | Carbon credit fund |
| KraneShares California Carbon Allowance Strategy ETF (KCCA) | Carbon credit fund |
Aker Carbon Capture ASA (OTC: AKCCF)
This carbon capture company has the backing of oilfield services giant Schlumberger Ltd. (SLB), lending stability to the smaller company.
Aker’s technology uses water and solvents to absorb carbon dioxide in a process that can be applied to emissions from gas, coal, cement manufacturing and oil refining.
The technology has been offered commercially since 2009, giving Aker Carbon Capture an important foothold in a developing industry that is set to become more important as time goes by.
“ACC is rapidly scaling,” notes Masson. “The company’s … solutions cater to high-emitting sectors like cement and blue hydrogen, aligning with global decarbonization trends and CCUS policy incentives, especially in North America.”
NET Power Inc. (NPWR)
This company’s technology burns natural gas, producing carbon dioxide that is mixed with recirculated CO2 and used to spin a turbine and generate electricity. Most of the carbon dioxide is recirculated, and nearly all of a small portion that exits the cycle is captured for sequestration or sale.
Like Aker, NET Power also has big backing, with the likes of Occidental and Baker Hughes Co. (BKR) on board.
“NET Power is advancing its proprietary … technology to deliver near-zero-emissions electricity from natural gas, capturing CO2 with minimal cost impact,” Masson says. He notes the company is working on modular, multi-unit designs to accelerate deployment and reduce risk.
LanzaTech Global Inc. (LNZA)
This company uses biotechnology to recycle carbon. LanzaTech describes its process as being similar to putting a brewery on an emissions source like a steel mill or landfill.
“Instead of using sugars and yeast to make beer, pollution is converted by bacteria to fuels and chemicals,” the company says on its website.
The company has backing from Brookfield Asset Management Ltd. (BAM) and a partnership with global steelmaker ArcelorMittal SA (MT).
“With its unique carbon recycling approach — converting industrial emissions into ethanol and sustainable fuels — LanzaTech supports circular economy goals,” Masson says.
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Pond Technologies Holdings Inc. (OTC: PNDHF)
This company’s technology uses carbon dioxide from industrial waste to grow algae more productively. Pond then sells a microalgae-derived antioxidant. It also licenses its technology for fees and royalties.
The company says microalgae are becoming increasingly important in pharmaceuticals and cosmetics, nutraceuticals, human nutrition, aqua farming, bioplastics and biofuels.
“With diversified revenue from CCU tech licensing, algae product sales and new nutraceutical opportunities … Pond is evolving as a leader in carbon utilization through biotechnology,” Masson says.
At the same time, Pond’s immediate future seems murky.
In mid-March, the company tapped an investment bank to lead a review of strategic alternatives that included the possibility of a corporate sale, a merger or other business combination, strategic investment, joint ventures, asset divestitures, continuation as a standalone public company or privatization.
CF Industries Holdings Inc. (CF)
Kahn points to this company that has two carbon capture projects in the works to reduce CO2 emissions produced when making ammonia for fertilizer.
It’s spending about $200 million at a Louisiana facility that will enable Exxon Mobil Corp. (XOM) to transport and sequester carbon dioxide in permanent geologic storage.
The company is also working on a carbon capture and sequestration project in Mississippi, where Exxon will also transport and store the CO2.
“CF believes they will be first to market with a significant volume of blue ammonia … with virtually all carbon produced from this process captured and sequestered,” Kahn says. “This will help CF reach its CO2 emissions reduction goal of 25% by 2030.”
KraneShares Global Carbon ETF (KRBN)
Carbon reduction projects can produce carbon credits, with each credit representing one metric ton of carbon dioxide saved. Those credits can form the basis for carbon credit futures, which can function as bets on carbon price movements.
You can buy those futures contracts via the CME Group or Intercontinental Exchange, but an easier way to go is through exchange-traded funds, or ETFs, that invest in carbon credit futures.
Those include KraneShares Global Carbon ETF, which has holdings from the major carbon-compliance markets in California, the northeastern U.S. and the European Union.
Carbon credit funds will generally rise in price along with carbon, but as carbon capture technology expands and creates more carbon credits, these funds may actually fall in value as more CO2 credits in circulation lower the price of compliance.
KraneShares California Carbon Allowance Strategy ETF (KCCA)
Investors who want to focus on North American carbon credits can consider this ETF.
The fund targets the California Carbon Allowances (CCA) cap-and-trade program by benchmarking itself to the S&P Carbon Credit CCA Index that tracks the most-traded CCA futures contracts.
The cap-and-trade program is run by the California Air Resources Board and covers about 80% of California’s greenhouse gas emissions as well as emissions from Quebec, creating the biggest carbon trading market in North America.
KraneShares says the fund can potentially provide portfolio diversification because of the historically low correlation between carbon allowance futures and traditional asset classes including stocks and bonds.
Separately, investors can focus on the European Union Allowances program with the KraneShares European Carbon Allowance Strategy ETF (KEUA). The European program is the world’s oldest and most liquid carbon allowance market.
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7 Carbon Capture Stocks and ETFs to Watch originally appeared on usnews.com
Update 03/31/25: This story was published at an earlier date and has been updated with new information.
