Carbon-Negative Solutions in the Energy Industry

Inês Brito
April 1, 2021

Carbon-Negative Solutions in the Energy Industry

With IOCs trying to meet their carbon-neutrality goals, companies are looking for new methods and solutions to diversify their portfolio and reduce their carbon footprint. During our recent episode of The Leaders of Energy Change podcast, Moji Karimi Co-Founder and CEO of Cemvita Factory Inc., and Blake Manuel, Director of Corporate Development, shared their insight on how IOCs can transfer their expertise from oil and gas production and distribution to renewables, and one of the biggest challenges in this endeavour, energy storage.

The campaign for a negative carbon footprint

A glimpse at the future of fossil fuels

When it comes to de-carbonizing energy companies, there are many new technologies and solutions on the way, with CCUS technologies being some of the most promising solutions. CCUS technologies can greatly impact an energy company's decarbonization, as they capture carbon dioxide (CO2), and repurpose it. By capturing CO2 directly from the flue gas air in the initial emission sources, it can be used as raw material, and it becomes possible to convert it with different methods into something more valuable, reducing the carbon-footprint, and creating new avenues for monetization and product lines.

The future of many companies all over the world, including ones in the oil & gas industry, will be connected to their campaign for a negative carbon footprint, a goal that is becoming more pressing every day, but is also a great accelerator of new solutions.

In order to reduce their footprint and comply with the Paris Agreement, they will have to find new ways to continue operations, while reducing and ideally, re-purposing their CO2 emissions.

With the right methods, the oil and gas industry will be able to decarbonize its operations, and invest in solar and wind energy, thus reducing its environmental footprint.

Is diversification into renewable energies the only way to decarbonize oil and gas companies?

For IOCs, the question of the decade is "Am I an oil and gas or an energy company?"

If they decide on the latter, then, as a diverse energy supplier it is of utmost importance for them to divest their portfolio into other renewable energies. Thankfully, IOCs and EPs come with a lot of hard-earned infrastructure knowledge and the experience of developing complex projects and managing them. This really important skill set is directly transferable to renewable energy projects.

At the same time, energy producers can continue with their main oil and gas business and diversify their portfolio, using a circular economy policy, starting with renewables in the areas that are easiest.

Oil and gas still has a large supply of energy and optimized cost of production in their arsenal, while renewable energy is facing a lot of early-stage OPEX challenges. However, the future looks bright for renewables, with the brightest minds working on solving the energy storage problem.

Investment opportunities emerging in the energy transition?

The energy sector is a very mature industry, however, a shift of goals and budgets to energy transition has enabled and empowered start-ups to launch their projects and promote new ideas in the past two years.  As a result, opportunities for capital are being created for companies that are investing in new solutions in renewables. Therefore, this shift is creating opportunities for private equity for these energy solutions and has been the main driver of new technology in the energy transition.

Technology is driving and creating investment opportunities, for example, high-risk technology projects, which makes investing in them look much more like venture capital than growth equity.

In order to have a developing ecosystem, many of the opportunities need to have capital available for people who create new solutions and enable them to launch these companies, because what it will look like is much more energy, venture capital.

New technologies are constantly emerging, which means that there is more available capital to be invested in these start-ups, as the examples of major IOCs benefiting from investing in tech start-ups and new ideas become more prominent. So, as more ideas arrive on the market, even more majors will be able and eager to invest in new ideas or directly in the start-ups themselves.

This shift is important not only for capital and the energy transition, but for the economy as a whole, as increased investments from the energy majors, and a willingness to part with capital in exchange for new opportunities supports the governments in their endeavour to create robust entrepreneurial zones in their cities, with the hunt for company talent and tech hubs becoming more intense than ever.

Are you interested in learning more about new energy transition and carbon-negative solutions in the Energy Industry? Listen to the full episode or reach out to us directly.

Listen HERE to “The Leaders of Energy Change

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