The deal
British company Climate Investment (CI) has announced that it has invested in carbon capture company Trace Carbon Solutions. Following the CI investment, Trace will have more than $420m (£331.09) of equity capital commitments from Quantum Capital Group, CI and Trace management.
Why it matters
Trace Carbon Solutions is a US-based company that develops low-cost carbon capture and storage (CCS) technologies. This is the eighth CCS company that CI has invested in through its Catalyst Fund I.
“CI’s background in investing across the CCS value chain will be highly valuable to our team as we continue to develop our projects across North America,” said Josh Weber, Trace’s chief executive officer.
The CCS market size exceeded $6bn in 2022 and is expected to expand by more than 20% from 2023 to 2030.
“Trace has developed an operating model that we believe can accelerate the buildout of CCS infrastructure," CI Investment Principal Joey Bernica, who will join the Trace Board, said in a press release. "The firm has built an exceptional management team with proven expertise in developing gas infrastructure projects."
The US Government’s Inflation Reduction Act (IRA) offers tax exemptions for large-scale carbon capture developments in the US. The IRA provides tax credits of $85 per tonne of CO₂ captured and stored and $180 for every tonne of CO₂ removed through direct air capture (DAC) and permanently stored.
The details
Trace Carbon Solutions is focused on the development of large-scale industrial emissions and works with companies in the oil and gas industry, power refining, petrochemicals and manufacturing.
US policy has been very accommodating to carbon capture technologies in recent years. President Biden’s Bipartisan Infrastructure Law included more than $12bn of investments in next-generation carbon capture, DAC, integrated CCS demonstrations and industrial emissions reduction demonstration projects, as well as CO₂ transport and storage infrastructure, according to the White House.
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