Investors looking to change the world while capitalizing on technology that’s likely to grow rapidly in the future should consider stocks and exchange-traded funds related to the best carbon capture stocks to invest in.
With the effects of climate change already hitting spots around the globe, carbon capture technology has an impetus to grow.
Fewer carbon emissions in the atmosphere slow global warming, making carbon capture technology important now and in the future.
Carbon capture is the process of filtering carbon dioxide and capturing it before it can go into the atmosphere.
Large potential carbon sources, including coal-fired power plants, chemical plants, and biomass power plants, often use carbon capture to make their operations less harmful to the environment.
After the carbon dioxide gets captured as its emitted, it is stored for short-term projects or decades, keeping the planet safer from climate change and the weather-related havoc it can cause.
Carbon capture can be part of the solution to rising sea levels and severe weather caused by carbon dioxide emissions. Investing in those companies leading the way can be essential to supporting carbon capture and its expansion in the world.
Whether you’re looking for investments that will do good, as in solving the planet’s climate crisis, or do well in your portfolio, carbon capture equities may fit the bill.
No matter what your investment goals may be – supporting solutions to climate change or funding your retirement on a golf course – carbon capture investments could be a vital part of it.
Table of Contents
- Our Carbon Capture Investment Methodology
- The 10 Best Carbon Capture Stocks and ETFs
- Best for Growth Investors: NRG Energy (NRG)
- Best for Pure Carbon Capture Investors: Aker Carbon Capture (ACC.OL)
- Best for Buy and Hold Investors: Exxon Mobil (XOM)
- Best Entry into International Carbon Capture Stock: Equinor (EQNR)
- Best for Tracking Carbon Prices: KraneShares Global Carbon Strategy ETF (KRBN)
- Best for Penny Stock Investors: FuelCell Energy (FCEL)
- Best for Diversification: iShares MSCI ACWI Low Carbon Target ETF (CRBN)
- Best for Energy Conscious Investors: VanEck Low Carbon Energy ETF (SMOG)
- Best for International Blue Chips: Royal Dutch Shell (RDS.A)
- Best for Buying Now: Chevron (CVX)
Our Carbon Capture Investment Methodology
Differences make the world interesting. What might seem like a smart investment to me would give someone else an ulcer. A cautious low-risk investment that makes one investor happy could make another worry about the risk of inflation eating away any profits.
Since every investor is unique, we analyzed the vast array of carbon capture stocks and exchange-traded funds with an eye for finding the best options for those who are growth-minded as well as for those who are value investors who like to buy stocks of established companies and hold them for the long term.
Investors have different goals, too. Younger investors may want to take more risks to jumpstart the growth of their portfolios.
Investors who are nearing retirement should be more cautious. Investing in carbon capture stocks labeled as value investments are those that are from established companies with successful track records.
We also considered those who like the passive income that dividends can yield. Since some of the companies we chose in this carbon capture corral have high dividend yields, they could fit inside a passive income dividend ladder.
If you’re wondering, ‘Is carbon capture stock a good investment?’ it can be. P/E ratios, risk, and financial stability were all analyzed in this roundup of the best carbon capture stocks you can invest in today.
Another consideration is how much carbon capture a company does. Is it an area of research for a company that focuses mostly on other operations? Is carbon capture a major part of an exchange-traded fund’s holdings or the bulk of it?
Some investors want diversification within carbon capture technology companies in our roundup, while others want to invest solely in carbon capture.
We expanded our carbon capture stocks corral to include exchange-traded funds for several reasons. One is that exchange-traded fund offerings have included the low-carbon sector.
These ETFs are also as easily traded as stocks in individual companies. ETFs are low in fees, and, for beginning investors, they can be a great way to get instant diversification.
The 10 Best Carbon Capture Stocks and ETFs
If you want to capture profits by investing in carbon capture companies’ stocks and exchange-traded funds, here are my picks for everyone from the risk-averse value investor to those who like investing in startups and growth stocks.
While past performance doesn’t indicate future gains, these carbon capture stocks and ETFs are the best options.
NRG Energy has plenty for investors to like – in the past five years, NRG has provided a return on investment of more than 216 percent to its shareholders.
This company also has interests in residential solar and electric vehicle sectors, making it a growth stock choice for environmentalists and investors looking for buys in the energy sector.
Rated as a buy by most analysts giving it a look, NRG can be an excellent stock to add to your growth portfolio. As most of its operations are in Texas, that can be seen as a risk.
The record snowfall seen in the Lone Star State and record power outages can show what could possibly happen when a company’s operations are located in just one area of the world.
- NRG pays a consistent dividend, providing passive income.
- With a market capitalization of more than $8 billion, NRG Energy isn’t small and is poised to grow, according to some analysts.
- NRG Energy has been projected to grow in the future by leading investment analysts.
- NRG has gone bankrupt once – will they succeed this time around?
For investors who want to invest in a pure carbon capture company and not a fossil fuel company that does a bit of carbon capture research, there’s Aker Carbon Capture.
Aker Carbon Capture focuses on the entire process, from capture and transport to utilization and storage of carbon dioxide.
The company has more than 20 years of experience in carbon capture and sequestration as part of the Norwegian Aker Group.
While the idea of investing in a company that’s completely focused on carbon capture may be exciting to those, who are passionate about the potential of carbon capture and sequestration, ACC.OL doesn’t have diversification that can protect against losses.
- Aker has two decades of carbon capture and sequestration experience.
- Aker Carbon Capture is purely a carbon capture company.
- Norway, a country greatly concerned about the effects of climate change, is a leader in carbon capture and storage.
- Stock in Aker may be more volatile than other carbon capture choices.
Exxon Mobil may have a reputation for being an oil company, but it’s also the world leader in carbon capture and sequestration.
Environmentalists may not be fans of Big Oil, but these companies don’t want to be left out in the cold as the planet moves away from fossil fuels. Companies like Exxon are often leaders in new technologies as they have the funds available for the research and development involved.
Exxon’s announcement of emission-reduction targets has attracted some attention from environmentally conscious investors, and the XOM stock has seen a 47 percent increase in share price over the past year.
- Exxon Mobil has a market cap of more than $259 billion, making it one of the world’s larger companies.
- XOM investors have seen a return of more than 48 percent in the past year.
- Passive income fans will love Exxon Mobil’s yield of 4.94 percent, which would be nice passive income during your retirement.
- Trading at highs right now, so XOM isn’t a bargain
See Related: Best EV Charging Station Stocks
Investors looking for foreign equities involved in carbon capture should take a look at Equinor. A Norwegian company, Equinor ASA, is one of the world’s premier energy companies with operations in 30 different countries. It’s also Europe’s second-largest natural gas producer, and natural gas prices are up.
Because Norway is one of the lower countries in Europe, making it particularly susceptible to the devastating effects of global warming and climate change.
It makes sense that Norwegian companies are motivated to find solutions to this global problem. Equinor is searching for ways to lower carbon emissions while providing the energy the world needs.
- Equinor has a solid financial foundation that makes EQNR a fit for value investors.
- EQNR shows growth potential in the future, making this a stock that investors might want to buy and hold for years or decades.
- EQNR has the funds for carbon capture research and development, which may not be the case with startup companies.
- Equinor’s dividend yield of 1.84 percent is lower than some of our other choices, but it does provide some passive income to shareholders.
For those who’d like to invest in the performance of CO2 stocks without holding lots of carbon capture stocks individually, there’s KRBN or KraneShares Global Carbon Strategy ETF. KRBN tracks a carbon credit future index based on cap-and-trade programs. This can allow investors to hedge risk and go long on the performance of carbon capture while supporting positive climate change investing.
Early investors in KRBN have ridden the ETF straight up, seeing share prices increase an amazing 158 percent in the past five years. As carbon prices and cap-and-trade increase, count on KRBN to be a strong possibility for future growth in your portfolio.
- KraneShares Global Carbon Strategy ETF is going long on the performance of carbon capture, and the price of carbon supports pollution reduction.
- Based on short-term trends, growth in KRBN’s share price of more than 28 percent is expected this year.
- Like most exchange-traded funds, KRBN has a low expense ratio.
- Don’t count on KRBN for passive income, though. It’s not an option for dividend income.
See Related: 13 Best Clean Energy Venture Capital Firms
Not for the faint of heart, FCEL is classified as a penny stock by the Securities and Exchange Commission because it’s trading at less than $5 a share.
A deal with Exxon Mobil saved FuelCell Energy from bankruptcy, but there may be more volatility ahead for this designer and developer of fuel cell technology.
FCEL could be poised for a breakout of the penny stock neighborhood, but this isn’t a stock that should be the basis of your retirement fund.
Don’t put money in FCEL that you can’t afford to lose, since this stock is far from a sure thing.
- $60 million deal may hint of a brighter future for FuelCell Energy.
- The price of FCEL is a bargain at less than $5 a share if FuelCell Energy shares price rises.
- Most analysts rate FCEL as a stock to hold for now, so stay tuned.
- FCEL isn’t a good carbon capture investment for the risk-averse investor or one who can’t afford to take a loss.
The iShares MSCI ACWI Low Carbon Target ETF tracks the MSCI ACWI Low-Carbon Target Index, trying to achieve similar returns. This ETF invests in global companies that have a lower carbon footprint than others. This can include companies that are involved in carbon capture as well as well-known firms such as Apple and Microsoft.
CRBN has given investors s phenomenal return on investment of more than 73 percent. CRBN’s investments are supportive of carbon capture and sequestration, but most of them are not hands-on companies in the carbon capture process. Still, it’s hard to argue with the success that this exchange-traded fund is seeing.
- A diversified selection of quality stocks is included in the iShares MSCI ACWI Low Carbon Target ETF.
- Returns of more than 12 percent during the past year have made CRBN investors happy.
- CRBN has a low expense ratio typical of exchange-traded funds.
- Most CRBN holdings aren’t directly involved in carbon capture and sequestration
See Related: Best Renewable Natural Gas (RNG) Stocks
The SMOG ETF from VanEck tracks a market-cap-weighted index of companies that focus on renewable energy, which can include companies that also are involved in carbon capture.
Investors who are interested in carbon capture but also a broader range of low-emissions energy options may want to take a look at SMOG.
SMOG has holdings in utilities, industrial stocks, basic materials, energy, consumer stocks, technology, and real estate, so it carries diversification.
In the past five years, SMOG has rewarded investors with a return of more than 26 percent.
- ETF tracks a variety of companies around the world that are focused on renewable energy as well as carbon capture and storage.
- Like many exchange-traded funds in all sectors, SMOG has a low expense ratio.
- Diversification within the sector makes SMOG a smart choice for an investor looking for asset allocation that will cushion any dips.
- The share price of SMOG is down more than 20 percent over the past year, either making it a bargain or an exchange-traded fund that makes you leery.
See Related: How to Buy Stocks Without a Broker
Headquartered in the Netherlands, Royal Dutch Shell includes its Catalysts and Technologies division which specializes in the capture of carbon dioxide from pre-and post-combustion industrial emissions and its use and storage.
Investors bullish on Shell say that the global company is poised to grow as they decrease fossil fuel production and increase production in more profitable areas such as chemicals and carbon capture and storage.
For investors who want carbon capture exposure through a mature and respected company, Shell is a great choice. Royal Dutch Shell pays dividends, though not at the rate of some similar companies. Shell has a healthy stock price, and it’s becoming much more than a fossil fuel company.
- Royal Dutch Shell is a mature company with global operations.
- Growth is projected in areas including chemicals and carbon capture and storage for Shell.
- Shell’s stock price shows more than 22 percent growth during the past year.
- Shell’s dividend yield of 2.79 percent is not as high as those of other carbon capture investment options.
See Related: How to Buy Carbon Credits [Step-by-Step Guide]
Chevron is known as a traditional fossil fuel company, but its recent deal with Blue Planet puts it in the carbon capture and sequestration business, too. Chevron Technology Ventures has a commitment to solutions that will lower the amount of carbon dioxide being emitted.
Chevron and San Jose-based Blue Planet Systems Corporation are participating jointly in several pilot projects in carbon capture and sequestration.
With a dividend yield of 4.12 percent, Chevron could also be a choice for passive investors who want dependable dividend income. Its yield is high enough to be part of a dividend ladder for an environmentally-conscious investor.
- Chevron has been rated as a buy by multiple analysts since growth is predicted.
- Chevron stock has shown more than a 36 percent return on investment during the past year.
- This fuel company is on a firm financial footing, so Chevron is a stock to hold for the foreseeable future as a value stock.
- Chevron bears and pure carbon capture investors say Chevron could do more to lower carbon dioxide emissions.
See related sources