Climate Investment Opportunities
Low-carbon hydrogen
CCUS and DAC
Sustainable fuels
Renewable
natural gas
Grid renewables and storage
Distributed energy and efficiency
Nature-based solutions and carbon markets
Waste management and recycling
Asset centric
Technology centric
Service centric
Technology provider handles EPC within facility
Integrated point-soure capture, transport, and storage projects
Facility-level point source capture
Midstream development and operation
Emerging capture tech
Emerging utilization tech
Mature utilization applications
DAC OEMs
Compressors and other system components
EPC and O&M services
Low-carbon hydrogen
(H ), a crucial decarbonization lever for many sectors, is expected to show sustained double-digit growth through 2050 in North America. In the near-term, IIJA funding of $8 billion for six to ten regional hubs and the IRA’s production tax credit of up to $3/kg are likely to drive a sharp increase in projects. Although project economics should improve over time, early movers can gain an advantage by securing favorable production locations, rights-of-way for transport, and scarce geological storage.
Asset centric
Technology centric
Service centric
Renewable
power
generation
Mature system components (e.g., compressors, separation membranes)
EPC and O&M services
Transport and storage
infrastructure
Power
H
production
2
Storage
Transport
Retail
Industrial
processes
Transport
applications
Power and heat generation
Production
facilities
Refueling
stations
Integrated into existing industrial facilities
H fleet operator
H CHP plants
2
2
Electrolyzer
OEMs
Fuel cell OEMs
First
generation
Second
generation
Service centric
Sustainable fuels are hydrocarbons made from organic waste (biofuels) or from H and CO (e-fuels) as replacements for fossil fuels. Biofuels are the more established category and offer the only at-scale solution for decarbonizing modes of transportation that cannot be electrified. These fuels have strong policy support, including a $6 billion allocation under the IRA, the adoption of LCFS in a growing number of US states and in Canada, and the likelihood that US federal RFS will drive strong subsector growth through 2030.
(feedstock agnostic)
Soybean crushing facilities
Animal fats/tallow aggregators and rendering facilities
UCO aggregators
Crushing equipment manufacturers
Advanced second-generation renewable fuels technology developers
EPC and O&M services
Carbon offsets from BECCS
LCFS and
RIN trading
Asset centric and technology centric
Asset centric
Tech centric
Sustainable fuels integrated into existing fuel transport, storage, and distribution
RNG is produced through anaerobic digestion of organic feedstocks to produce biogas, which is then filtered to remove impurities and upgraded to methane. Upgrading allows direct injection of the final product into existing natural gas infrastructure. In North America, IRA investment tax credits of up to 50%, LCFS and RIN credit programs in the US and Canada, and cost recovery mechanisms for utilities are expected to drive strong growth through 2040. Even so, market expected to remain supply-constrained, creating pricing opportunities.
Haulers and aggregators
Conversion
Transportation, marketing, and distribution
Trading
Asset centric
Technology centric
Service centric
Upgrading
Organic food waste
Agricultural
Landfill gas
Wastewater
Organic food waste RNG facilities
Agricultural RNG facilities
Landfill gas RNG facilities
Wastewater RNG facilities
Hyperlocal market with limited roll-up synergies
Production largely
occurs onsite;
no haulage needed
Integrated into existing
natural gas transport,
storage, and distribution
Digesters, upgrading systems, and other production technologies
EPC and O&M services
LCFS and
RIN trading
Asset centric
Equipment/
technology centric
Service centric
Generation
Storage
Transmission
Development
Construction
Operations
Equipment
Grid renewables and storage are set for rapid growth over the coming decade. In the US, IRA and IIJA tax credits, along with renewable power standards in 36 states, could shift generation to 65%–80% renewable by 2030 and increase nonresidential storage by 40X–50X. Significant investment in transmission infrastructure—as well as in generation and storage—will be needed to alleviate interconnection bottlenecks. The industry faces compressing returns, but these challenges also create opportunities to invest in technology and services that optimize performance.
Independent power producers
Utility-scale battery storage developers
Transmission developers
LDES technology
Utility-scale battery integrators
Solar racking and tracking
Integration across generation, storage, and transmission is common
Asset performance management technology
Third-party O&M services
EPC
Solar
Battery storage
Smart metering and grid access
Distributed energy resources encompass generation, storage, and efficiency technologies spanning residential and commercial/industrial segments. The space is growing rapidly in response to new technology, lower costs, favorable policies (including several relevant IRA incentives), and greater focus on sustainability and resilience. Historically siloed business models are converging through software and analytics, shifting competitive dynamics and creating new value pools.
Equipment manufacturing
Installation
The demand for voluntary carbon offsets is set to increase by 25 or more per year through 2030. Nature-based credits should continue to dominate the market because of their maturity and the increasing focus on co-benefits. Although supply will grow significantly, a supply gap is likely in the mid-2020s, leading to price opportunities. Multiple market frictions currently make the market inefficient, creating opportunities for technology solutions and services that address these challenges.
The waste management and recycling subsector is transforming as a result of increased emphasis on protecting biodiversity and mitigating the environmentally harmful impact of extracting virgin materials. In North America, standards governing environmental discharges are tightening, and policies that extend producers’ responsibility are under consideration. The subsector encompasses a wide array of businesses along the collection-sorting-treatment-recycling value chain. Investment theses across the landscape are underpinned by roll-up opportunities, long-term recession-proof contracts, and scarcity in the form of limitations on permits or access to high-demand recycled materials.
Electrified heating and cooling
Building automation and energy management
Wholesale and distribution
System/project design
EV charging
Operations and maintenance
Analytics and aggregation
VPP and DERMS
BEMS
E-mobility service providers and charge point platforms
Microgrids and energy-as-a-service
C&I and community solar
ESCO
EV charge point operators
EV-charging hardware OEMs
Solar and storage system designers and installers
Electrical distributors and suppliers
HVAC, heat pump, and sensor distributors and suppliers
HVAC, heat pump, and sensor OEMs
Solar racking
Microinverters and string inverters
Battery OEM
Smart meter OEM
2
Note: BECCS = bioenergy with carbon capture and storage; EPC = engineering, procurement, and construction; LCFS = low-carbon fuel standard; O&M = operations and maintenance; RFS = renewable fuel standards; RIN = renewable identification numbers; UCO = used cooking oil.
Non-exhaustive
Note: EPC = engineering, procurement, and construction ; IIJA = Infrastructure Investment and Jobs Act; IRA = Inflation Reduction Act;
LDES = long-duration energy storage; O&M = operations and maintenance; PPA = power purchase agreement.
Non-exhaustive
Note: BEMS = building energy management system; C&I = commercial and industrial; DERMS = distributed energy resource management system; ESCO = energy service company; HVAC = heating, ventilation, and air conditioning; IRA = Inflation Reduction Act; VPP = virtual power plant.
Non-exhaustive
Note: CDM = clean development mechanism; CORSIA = Carbon Offsetting and Reduction Scheme for International Aviation; MRV = monitoring, reporting, and verification; PRA = price reporting agency; SDM = sustainable development mechanism.
Non-exhaustive
Voluntary market offsets (including industry schemes)
Upstream players
Buyers
Midstream and downstream players
Compliance market offsets
Tech players
Project development
Issuance and retirement
Voluntary
Certification
Structuring
Trading
Settlement
Data services
International organizations supporting carbon offset market
Nature-based solutions credit supply
Project developers
Validation/
verification
bodies
Private standards
Portfolio managers
Asset-backed retailers
Retailers
Marketplaces
Buyer advisory services
Bilateral agreements
Registry plat-forms
CORSIA registry
Third-party registries
Data providers; industry data; potential PRAs
Individuals
Oil and gas
Corporate
Corporate
Technology
Power
Aviation
Others
Oil and gas
Technology
Power
Aviation
Bilateral agreements
Brokers
Public standards
CDM/SDM
Marketplaces
Data providers
Joint crediting mechanism
Joint investment
Credit MRV technology
Block-chain-enabled marketplaces
Valuation and data
Note: AI/ML = artificial intelligence/machine learning; D&D = deactivation and decommissioning; EV = electric vehicle; IIJA = Infrastructure Investment and Jobs Act; OFW = organic food waste; RNG = renewable natural gas; UCO = used cooking oil.
See “Sustainable fuels” and “Renewable natural gas” tabs.
Non-exhaustive
Technology
(e.g., AI/ML and equipment)
Waste-to-energy
(e.g., testing,
remediation, clean-up)
Recycling and waste-to-value
Treatment and disposal
Aggregation and sorting
Pickup and collection
Consulting, engineering, and resource management
Waste streams
(nonexhaustive)
End customers
Municipal/consumer
Commercial/industrial
Infrastructure
Municipal wastewater
Plastics
Other recyclables
Electronics, paper, and glass recycling
Waste technology
Environmental remediation
Plastics recycling
Incineration
Municipal wastewater RNG production
1
1
Biosolids management
Biofuels and RNG production facilities
1
Specialty
Construction and demolition
Construction and demolition waste management
Hazardous waste management
Wind turbine recycling
Nuclear D&D
Organics (OFW, UCO, agriculture)
Industrial hazardous
EV batteries
EV battery recycling
Environmental consulting
OFW and UCO aggregators
1
Municipal solid waste management
Municipal wastewater systems
Opportunities
Environmental consulting services that support companies in designing effective waste management programs to mitigate risks associated with regulatory compliance and reputation
Tailwinds from tightening regulation, enhanced reporting requirements, and ESG pressure
Consolidation opportunities involving niche players that specialize in specific segments that might be used to build more comprehensive offerings
•
•
•
Opportunities
Development and operation of facilities for physical and chemical treatment of sewage sludge to produce biosolids for fertilizer use
Recession-resistant long-term contracts with wastewater facilities, with demand for biosolids benefiting from circularity and sustainability tailwinds in agriculture
Fragmented landscape, with 200+ regional players in US, presenting roll-up opportunities to drive operational efficiency
•
•
•
Opportunities
Services and facilities for collecting and sorting municipal solid waste for ultimate transfer to recyclers or landfill
Stable market on a trajectory to grow with GDP, bolstered by sticky, recession-resistant municipal contracts
Fragmented tail of local companies that could be targets for roll-up plays to improve operational efficiency
•
•
•
Opportunities
Companies that recover critical minerals from end-of-life EV batteries, often using proprietary technology
Critical area to meet growing EV battery demand, given the fundamental shortage and geopolitical risk associated with several key minerals
Lock-up of scarce supplies and establishment of offtake agreements with manufacturers essential for plant scale and profitability
•
•
•
Services and facilities for collection, treatment, and disposal of hazardous industrial waste
Opportunity to generate roll-up synergies through improved geographical density and operational efficiencies, in light of long tail of regional players
Potential to leverage an asset to build a platform through numerous adjacent services (e.g., industrial cleaning and emergency response)
•
•
•
Opportunities
Opportunities
Services that divert construction debris from landfill through recycling/reuse to reduce the impact of extracting virgin resources
Expected tailwind for the market due to IIJA’s boost to construction
Opportunity to target fragmented tail of local companies for roll-up plays to improve operational efficiency
•
•
•
Opportunities
Facilities for recycling plastics by various means, the most promising of which is use of pyrolysis to produce feedstock for petrochemical plants
Tailwinds from voluntary corporate action to reduce plastic waste and from tighter regulations such as rules that extend producer responsibility
Key roles of feedstock stability and offtake stability for pyrolysis plants
•
•
•
Opportunities
Providers of technology and services for removing pollutants or contaminants from water and soil
Tailwinds from rising environmental protection standards and an installed base of older infrastructure that requires abatement (e.g., lead and asbestos)
Opportunity to pursue roll-up plays in fragmented tail of local companies to improve operational efficiency
•
•
•
Opportunities
Companies that develop sensors, software, and robotics solutions to optimize processes throughout the waste management and recycling value chain
Tailwinds from broader circularity drivers, tightening labor costs for material recovery facilities, and growing capabilities of AI/ML technologies
Numerous early-stage companies along the value chain with potential to secure recession-resistant municipal contracts
•
•
•
Opportunities
Acquisition of land and development of nature-based offsets (e.g., through forest restoration and soil sequestration)
Flexibility to optimize for offsets or produced commodities such as timber, depending on prevailing prices
Opportunity for roll-up due to highly fragmented ownership of land in North America
Complexity in credit verification and price swings in both produced commodities and offsets markets
•
•
•
•
Opportunities
Companies that provide advisory services to developers to maximize offset generation and quality
Essential service for project developers seeking to navigate complex verification standards and buyer criteria
Opportunity to expand scope of offering through roll-up plays in a broad landscape of players with varying capabilities
•
•
•
Opportunities
Companies that advise credit buyers on purchase strategy for the voluntary and compliance markets
Essential service for buyers to ensure credible climate action as they navigate a fragmented offsets market with limited price visibility and widely varying offset quality
Opportunity to expand scope of offering through roll-up plays in a broad landscape of players with varying capabilities
•
•
•
Opportunities
Technology platforms that connect individuals and businesses to credit suppliers, offering greater transparency and lower transaction costs than over-the-counter brokers
A premium on players that have built partnerships with sizable credit suppliers and customers, as multiple early-stage platforms enter the market
•
•
Opportunities
Range of technology solutions for measurement, reporting, and verification of nature-based offsets
Key unlock to address market frictions related to verifiability, permanence, and additionality of offsets
•
•
Note: EPC = engineering, procurement, and construction; IRA = Inflation Reduction Act; LCFS = low-carbon fuel standard; O&M = operations and maintenance; RIN = renewable identification numbers; RNG = renewable natural gas.
Non-exhaustive
Opportunities
Development or acquisition of commercial and industrial or community solar photovoltaics and storage
Mature opportunity that continues to benefit from rising utility rates, falling solar/storage costs, and corporate decarbonization goals
Developers can create value through local market density, scale, and portfolio diversification, and disciplined project selection
•
•
•
Opportunities
Development and operation of public or fleet EV-charging infrastructure
With EV adoption growth, charging infrastructure will have to grow even faster given slower start
US public charging points expected to require
$30 billion or higher capex through 2030, with IRA incentives offsetting cost in low-income and rural communities
•
•
•
Opportunities
Companies that provide a range of efficiency services, including energy audit, solution design, financing solutions, and execution for commercial and public sector clients, under the umbrella term energy service company
Opportunities in an energy efficiency market that continues to be driven by aging infrastructure, corporate sustainability goals, rising energy costs, and government incentives
Consolidation opportunities possible among smaller players with deep local relationships but limited services and scale
•
•
•
Opportunities
Companies that provide services, integration technology, and financing solutions for microgrids to enhance resilience, sustainability, and cost benefits
Potential to benefit from overlapping IRA incentives for renewable generation, efficiency, EV charging, and manufacturing
•
•
Opportunities
Companies that supply software to dynamically monitor and control a building's energy needs with the goal of minimizing total energy cost
Fast-growing segment of the overall energy efficiency market that allows building owners to capture savings while deferring HVAC capex
In a market dominated by large OEMs, opportunities to invest in standalone players that can build niches with custom applications, establish white label partnerships with ESCOs, or serve underpenetrated segments
•
•
•
Opportunities
Companies that manufacture charging equipment for electric vehicles, including private low-power AC wall boxes, public slow-charging terminals, and public DC fast-charging terminals
Opportunity to target production scale and partnerships with leading EV charge point operators, key success factors in this area
•
•
Opportunities
Technology platforms that aggregate and optimize DERMS to dynamically interact with the grid
Potential for aggregated DERMS to receive compensation from the grid for deferred investment, demand response, and ancillary services, as well as to capture arbitrage opportunities in energy markets
Early stage of implementation despite FERC order 2222 mandating that regional transmission organizations and independent system operators accommodate DERMS aggregations
•
•
•
Opportunities
Software solutions for managing EV charge points, providing customer interfaces, and enabling interoperability across charging networks
Opportunity to pursue partnerships with leading EV charge point operators, a key success factor to realize scale
•
•
Opportunities
Development or acquisition of a portfolio of grid-scale solar or wind generation
Projected tripling of installed capacity by 2030 due to cost reduction and policy incentives
Need for developers and operators to navigate increased merchant risk and bottlenecks in grid connection and supply chain
Potential for developers to manage risk and maximize value through sophistication in project selection, scale for cost efficiencies, and financing structures to optimize cost of capital
•
•
•
•
Opportunities
Development or acquisition of a portfolio of utility-scale storage assets, either standalone or co-located with generation
Anticipated 40X increase in installed utility storage from 2020 to 2030, driven by increased penetration of renewables and advances in battery technology
Significantly improved project economics as a result of addition of storage to the IRA’s investment tax credit program
•
•
•
Opportunities
Development or acquisition of high-voltage transmission infrastructure
Need for significant investment to address grid interconnection bottlenecks and replace aging infrastructure
Expectation that IRA and IIJA funding will drive a $70 billion incremental investment in transmission through 2030
Higher returns in transmission than in renewables for developers that navigate permitting hurdles and lengthy development timelines
•
•
•
•
Opportunities
Companies that develop long-duration energy storage, with the capacity to store and discharge energy for eight or more hours
Greater renewables penetration possible with LDES owing to its cost-effectiveness than an overbuild of lithium-ion storage would accommodate
Anticipated 40X growth in total addressable from 2025 to 2035
Potential rapid growth in several emerging technologies approaching commercialization if they can demonstrate economics at scale
•
•
•
•
Opportunities
Companies that provide software solutions to maximize the value of renewable generation and storage
Key functionalities of data aggregation, generation forecasting, price forecasting, predictive maintenance
Likely acceleration in penetration, with margin pressures increasing the need to optimize operations and with growing portfolio complexity
Varying player capabilities, which investors must navigate to pick winners
•
•
•
•
Opportunities
Engineering, procurement, and construction contracted by developers for renewables, storage, and transmission design and construction
Likely to benefit from tailwind of grid investment over the next decade, with potential to roll up local and regional players
•
•
Opportunities
Renewables and storage third-party operations and management service providers
Source of best-practice maintenance to optimize performance, with faster response times than OEMs, along with multivendor flexibility
Most developed option in solar, with providers beginning to take share from OEMs in storage and wind
•
•
•
Opportunities
Development of facilities to convert organic food waste into RNG
Likely rapid growth despite lower feedstock ceiling, buoyed by high LCFS revenue, corporate zero-landfill targets, and local landfill diversion regulations
Additional revenue through tipping fees, with some corporations willing to pay 20% premiums for landfill diversion
Optimal site selection with proximity to urban hubs for food waste and to alternative feedstocks critical for success
•
•
•
•
Opportunities
Development of facilities to convert livestock waste into RNG
Rapid expansion of space over the past five years, outpacing the overall industry, supported by low carbon intensity, relative stability of supply, and California subsidies
Potential of agricultural waste to offer the largest economical supply of all major RNG feedstocks
Drawbacks of potentially low yield per site and potentially high cost of connecting additional farms to the cluster feeding the facility
•
•
•
•
Opportunities
Development of facilities to convert landfill gas into RNG
Status of landfill gas as the most mature RNG feedstock, accounting for the bulk of production today and posing a low risk of feedstock disruption
Drawbacks of ceilings on new landfill developments and limited opportunity to secure the most economically attractive landfills near gas networks
•
•
•
Opportunities
Development of facilities to produce RNG from wastewater treatment plants
Reliable feedstock supply and lengthy contracts; also, in many cases, presence of onsite anaerobic digestors, which may lower capex
Drawbacks of low total availability vs. other feedstocks and potentially low site yield, requiring co-digestion with agricultural or food waste
•
•
•
Opportunities
Companies that design, manufacture, and service RNG production equipment
Various types of equipment (e.g., anaerobic digestors, upgrading systems, decanter centrifuges, and bioextruders)
Well-developed technology with innovation (e.g., in catalysts) offering incremental rather than disruptive improvement
Downside protection for most players through diversification across multiple oil and gas, petrochemical, and industrial applications
•
•
•
•
Opportunities
Companies contracted by developers to design, construct, and operate RNG production facilities
Highly fragmented market with limited technical differentiation, making developer relationships and project track record keys to success
Downside protection for most players due to diversification across oil and gas and chemicals end markets
•
•
•
Opportunities
Companies that aggregate and broker LCFS and RIN credits from renewable fuel production
Arbitrage opportunity, given market fluctuations and geographical price differences
Downside protection for traders that operate across multiple environmental markets in addition to LCFS credits and RINs (e.g., renewable energy certificates)
•
•
•
Opportunities
Development of facilities for crushing soybeans as a step prior to offtake to soybean oil refineries
Likely rapid increase in US soybean crushing capacity (currently at 90%+ utilization) to keep pace with growing renewable fuels demand
Announced expansions to increase capacity by 30% by 2025, with further increases needed by 2030
Continued status of soybean oil as a key feedstock, due to its relative security of supply and consistency of quality, despite its sustainability properties being lower than other feedstocks
•
•
•
•
Opportunities
Companies that aggregate and render animal fat for refinery offtake
Position of animal fat an attractive middle ground for refiners between UCO and soybean oil—second to UCO in sustainability properties and LCFS revenue, and second to soybean oil in supply availability and quality consistency
Downside protection for aggregators/renderers due to opportunity to supply oleochemical and pet food industries in addition to renewable fuels
•
•
•
Opportunities
Companies that collect, aggregate, and pretreat used cooking oil for offtake by refineries
Status of UCO as the feedstock of choice, with the highest LCFS revenue, due to having the lowest carbon intensity of first-generation and nonadvanced second-generation feedstocks
Opportunity for suppliers to capture incremental margin prices, forecasted to increase by 3X to 5X over 2020–2025 numbers
Opportunity for investors to create value by rolling up fragmented supplies to provide consistent quality and volumes to refiners
•
•
•
•
Opportunities
OEMs that produce soybean- and other oil-seed-crushing equipment
Benefit from tailwind of rapid increase in soybean-crushing capacity over the next decade
Downside protection for most players against sustainable fuel market risks as a result of diversification across end markets
•
•
•
Opportunities
Companies that produce second-generation biofuels, often with proprietary processes and technologies
Vital role of second-generation fuels in meeting projected 2030 demand for sustainable fuels, with a potential price premium due to lower carbon intensity and land use impact
Early-mover opportunity to secure offtake agreements with key customers such as airlines, and potential to scale rapidly through technology licensing
•
•
•
Opportunities
•
•
•
Opportunities
Companies that aggregate and broker low-carbon fuel standard and renewable identification number credits from renewable fuel production
Arbitrage opportunity, given market fluctuations and geographical price differences
Downside protection for traders that operate across multiple environmental markets in addition to LCFS credits and RINs (e.g., renewable energy certificates)
•
•
•
1
1
Note: EPC = engineering, procurement, and construction; IIJA = Infrastructure Investment and Jobs Act; IRA = Inflation Reduction Act; O&M = operations and maintenance.
Limited in North America today.
Non-exhaustive
1
Opportunities
Onsite or offsite renewable generation to supply green H
production facilities that must maximize renewable electricity consumption in order to maximize the IRA production tax credit
Natural adjacency for developers of grid scale renewables, with the bonus, if onsite, of avoiding current grid interconnection bottlenecks
•
•
Opportunities
Development of low-carbon H or
H -derivative (e.g., ammonia) production facilities—either greenfield or via retrofit of existing gray H facilities
Rapid growth in domestic demand in North America for low-carbon H through 2030, driven by industrial and transport applications
Enhanced US cost-competitiveness owing to the IRA production tax credit, creating export potential
Reduction in production costs of 30% or more by 2030, due to declining costs of electrolyzers and renewable energy
•
•
•
•
2
2
2
Opportunities
Development of transport and storage infrastructure for low-carbon H , including compression, salt caverns, liquid tankers, pipelines, and
CO storage for blue H projects
Early-mover opportunity to secure rights-of-way in high-density hubs and scarce geological storage locations; potential for cost reduction and patentable IP in storage
Investor access to opportunity through greenfield development or conversion of natural gas infrastructure
2
2
2
•
•
•
Opportunities
Development of H refueling stations at transport nodes (e.g., ports and trucking stops)
Potential acceleration of emerging opportunity due to IRA incentives and improved fuel cell performance (e.g., California to build 200 stations by 2025)
Early-mover opportunity to secure the most attractive locations, capture long-term offtake contracts with fleets, and lock in low-carbon H supply, driving predictable noncyclical cash flows
2
•
•
•
2
Opportunities
Companies that manufacture electrolyzers for green H production
Projected 9X growth in electrolyzer production by 2025 to meet increasing demand
Path to profitability through scale
Investor opportunity to secure a stake in OEMs poised for technology and cost leadership as the market expands
2
•
•
•
•
Opportunities
Companies that manufacture fuel cells for mobile and stationary applications
Opportunity to shift from low or negative margins today to profitability, as a result of increased production scale
Opportunity to build durable advantage with patented technology and locked-in vehicle OEM relationships
•
•
•
Opportunities
Companies that produce and/or distribute compressors, separator membranes, storage tanks, valves, and other mature system components required along the H value chain
Optimized go-to-market for players active in other subsectors to maximize the low-carbon H tailwind, while retaining downside protection through end-market diversification
2
•
•
2
Opportunities
Engineering, procurement, and construction and operations and maintenance service providers that operate across the low-carbon H value chain
Optimized go-to-market for players active in other subsectors to maximize the low-carbon H tailwind, while retaining downside protection through end-market diversification
2
2
•
•
2
2
DAC OEMs
Note: CCUS = carbon capture, utilization, and storage; DAC = direct-air capture; EPC = engineering, procurement, and construction; IRA = Inflation Reduction Act; O&M = operations and maintenance.
Non-exhaustive
Note: CCUS = carbon capture, utilization, and storage; DAC = direct-air capture.
2
Engineering, and operations/maintenance service providers engaged in plant design, construction, and operations
Optimized go-to-market to maximize the sustainable fuels tailwind but retain downside protection through exposure to oil and gas and other subsectors
Possible proprietary process and tech platforms owned by select engineering targets, creating durable advantage and recurring licensing revenue
Select an area below for a deeper dive
CCUS and DAC
Low-carbon hydrogen
Sustainable fuels
Renewable natural gas
Grid renewables and storage
Distributed energy and efficiency
Nature-based solutions and carbon markets
Waste management and recycling
Utilization
Offsets
Adjacencies
Storage
Transport
Capture
Capture
Capture of CO streams from stationery emitters or the atmosphere
Transport
Compression and transport via pipeline for storage or utilization
Storage
Permanent storage in the subsurface onshore or offshore
Adjacencies
Utilization:
Repurposing of captured CO for applications (e.g., sequestration, mineralization)
Offsets:
Generation and trading of carbon offsets from captured CO
Opportunities
Development of a portfolio of integrated point-source capture-transport-storage projects
Stable cash flows offered by §45Q and offtake agreements, with potential internal rates of return of 10% to 25% depending on stream concentration and emitter density
Early-mover opportunity to capture high-concentration emitters, obtain right-of-way for transport infrastructure, and access scarce geological storage locations in high-density hubs
•
•
•
Opportunities
Development of carbon capture infrastructure at emitters plugging into existing transport and storage infrastructure
Stable cash flows through revenue-sharing model with emitters for §45Q tax credits and CO offtake
Early-mover opportunity to capture opportunities with high-concentration CO streams in regions where transport and storage are not bottlenecked
2
2
•
•
•
Opportunities
Development of transportation and storage infrastructure to enable creation of CCUS hubs—either greenfield or converted legacy oil and gas infrastructure
Early-mover opportunity to secure right-of-way for transport infrastructure and scarce geological storage locations in high-density hubs to maximize returns
•
•
Opportunities
OEMs that develop carbon capture technology
Positioned for rapid growth as carbon capture deployment accelerates, unlocking economies of scale to improve the bottom line
Exposure to emerging technologies with cost reduction potential for low-concentration streams, unlocking further demand
•
•
•
Opportunities
Developers of mineralization, chemical synthesis, and other emerging utilization technologies
Mineralization to make building materials: a mature technology with a large addressable market and multiple active early-stage players, with potential exit to cement companies
Chemical synthesis (e.g., to produce synthetic fuels): long-term tailwinds in hard-to-abate sectors, with economics expected to become more attractive as costs of renewable energy, low-carbon H , and catalysts decrease
2
•
•
•
Opportunities
OEMs that develop and deploy direct-air capture technology
Near-term, growing demand from corporations willing to pay a premium for permanent and verifiable engineered removals; long-term potential demand from synthetic aviation fuel
Path to 50%+ declines in cost by 2030, despite costs exceeding $500 per ton of CO today
Significant valuation growth in funding rounds for market leaders; similar opportunities for emerging players as the market grows
2
•
•
•
•
Opportunities
Suppliers of CO for various mature applications, such as food and beverage and industrial use
Opportunity to lock in low-cost CO supplies from high-concentration streams (e.g., ethanol processing), creating a cost advantage as new end-use markets emerge
Limited alignment with climate mandates because applications typically do not result in permanent sequestration
2
2
•
•
•
Opportunities
Companies that produce and distribute compressors, tanks, valves, and other system components required for the CCUS value chain
Optimized go-to-market for players active in other subsectors to maximize the CCUS tailwind while retaining downside protection through end-market diversification
•
•
Opportunities
Engineering, procurement, and construction and operations and maintenance players active in CCUS development and operation, typically outside plant limits in transport and storage
Optimized go-to-market for players active in other subsectors, such as oil and gas, to maximize the CCUS tailwind while retaining downside protection through end-market diversification
•
•
Extensive use of CCUS and DAC to capture and offset emissions from hard-to-abate sectors is crucial to meeting decarbonization goals. The North America market is poised for rapid acceleration in these areas, as government incentives unlock project viability. In the US, the IRA increased the §45Q tax credit to $85 per ton for storage and $60 per ton for utilization, driving a step change in the volume of “in-the-money” emissions to more than 300 megatons—15 times the US’s current capacity.
Transportation and aggregation of feedstock
Conversion
Conversion of feedstock to biogas through anerobic digestion
Transportation,
marketing,
and distribution
Integration into the existing natural gas supply chain
Trading
Haulers and
aggregators
Upgrading
Filtering of impurities and CO from biogas to allow direct injection into existing natural gas infrastructure
2
Environmental credit transactions linked to renewable natural gas production
Equipment
Production of software and hardware for grid scale renewables
Development
Land acquisition, engineering design, procurement, permitting, and financing for renewable projects
Construction
Logistics, installation, and commissioning for renewable projects
Operations
Asset management, operation, and maintenance to ensure project success
Installation
Installation of distributed energy and efficiency equipment
Equipment
manufacturing
Manufacturing of distributed energy and efficiency system components
Wholesale and
distribution
Suppliers linking manufacturers with end-customers
System/project
design
Techno-economic design of distributed energy and efficiency systems
Operations and
maintenance
Management of installed system, with or without ownership in "as-a-service" model
Analytics and
aggregation
Software solutions enabling maximization of value derived from installed systems
Midstream and
downstream
Marketing and trading of generated carbon credits
Buyers
Acquisition of credits to offset carbon emissions
Upstream players
Development and certifitcation of carbon credits
H
2
production
H
2
logistics
H
2
utilization
H
2
production
Production of low-carbon H and derivatives
2
H
2
logistics
Storage, transportation, and retail of low-carbon H and derivatives
2
H
2
utilization
End-use of low-carbon H industrial, transport, power, and heat applications
2
Feedstock, aggregation, and processing
Conversion
Transportation, marketing, and distribution
Trading
Feedstock, aggregation,
and processing
Feedstock collection, pretreatment, and conversion into intermediate products (e.g., soybean crushing or tallow rendering) to be refined
Conversion
Conversion of feedstock oils into renewable fuels; no major technical differences from current refining
Transportation,
marketing,
and distribution
Integration into existing fuel supply chains
Trading
Environmental credit transactions linked to renewable fuel production
2
Extensive use of CCUS and DAC to capture and offset emissions from hard-to-abate sectors is crucial to meeting decarbonization goals. The North America market is poised for rapid acceleration in these areas, as government incentives unlock project viability. In the US, the IRA increased the §45Q tax credit to $85 per ton for storage and $60 per ton for utilization, driving a step change in the volume of “in-the-money” emissions to more than 300 megatons—15 times the US’s current capacity.
Low-carbon hydrogen
(H ), a crucial decarbonization lever for many sectors, is expected to show sustained double-digit growth through 2050 in North America. In the near-term, IIJA funding of $8 billion for six to ten regional hubs and the IRA’s production tax credit of up to $3/kg are likely to drive a sharp increase in projects. Although project economics should improve over time, early movers can gain an advantage by securing favorable production locations, rights-of-way for transport, and scarce geological storage.
2
Sustainable fuels are hydrocarbons made from organic waste (biofuels) or from H and CO (e-fuels) as replacements for fossil fuels. Biofuels are the more established category and offer the only at-scale solution for decarbonizing modes of transportation that cannot be electrified. These fuels have strong policy support, including a $6 billion allocation under the IRA, the adoption of LCFS in a growing number of US states and in Canada, and the likelihood that US federal RFS will drive strong subsector growth through 2030.
2
2
RNG is produced through anaerobic digestion of organic feedstocks to produce biogas, which is then filtered to remove impurities and upgraded to methane. Upgrading allows direct injection of the final product into existing natural gas infrastructure. In North America, IRA investment tax credits of up to 50%, LCFS and RIN credit programs in the US and Canada, and cost recovery mechanisms for utilities are expected to drive strong growth through 2040. Even so, market expected to remain supply-constrained, creating pricing opportunities.
Grid renewables and storage are set for rapid growth over the coming decade. In the US, IRA and IIJA tax credits, along with renewable power standards in 36 states, could shift generation to 65%–80% renewable by 2030 and increase nonresidential storage by 40X–50X. Significant investment in transmission infrastructure—as well as in generation and storage—will be needed to alleviate interconnection bottlenecks. The industry faces compressing returns, but these challenges also create opportunities to invest in technology and services that optimize performance.
Distributed energy resources encompass generation, storage, and efficiency technologies spanning residential and commercial/industrial segments. The space is growing rapidly in response to new technology, lower costs, favorable policies (including several relevant IRA incentives), and greater focus on sustainability and resilience. Historically siloed business models are converging through software and analytics, shifting competitive dynamics and creating new value pools.
The demand for voluntary carbon offsets is set to increase by 25 or more per year through 2030. Nature-based credits should continue to dominate the market because of their maturity and the increasing focus on co-benefits. Although supply will grow significantly, a supply gap is likely in the mid-2020s, leading to price opportunities. Multiple market frictions currently make the market inefficient, creating opportunities for technology solutions and services that address these challenges.
The waste management and recycling subsector is transforming as a result of increased emphasis on protecting biodiversity and mitigating the environmentally harmful impact of extracting virgin materials. In North America, standards governing environmental discharges are tightening, and policies that extend producers’ responsibility are under consideration. The subsector encompasses a wide array of businesses along the collection-sorting-treatment-recycling value chain. Investment theses across the landscape are underpinned by roll-up opportunities, long-term recession-proof contracts, and scarcity in the form of limitations on permits or access to high-demand recycled materials.
2
2
2
CCUS and DAC
Low-carbon hydrogen
Sustainable fuels
Renewable
natural gas
Grid renewables and storage
Distributed energy and efficiency
Nature-based solutions and carbon markets
Waste management and recycling
Select an area below or download the PDF ( ) at the bottom of your screen for a deeper dive
Climate Investment Opportunities
Note: CCUS = carbon capture, utilization, and storage; DAC = direct-air capture.
Renewable power equipment dominated by large OEMs; limited transactable opportunities
Waste management and recycling
The waste management and recycling subsector is transforming as a result of increased emphasis on protecting biodiversity and mitigating the environmentally harmful impact of extracting virgin materials. In North America, standards governing environmental discharges are tightening, and policies that extend producers’ responsibility are under consideration. The subsector encompasses a wide array of businesses along the collection-sorting-treatment-recycling value chain. Investment theses across the landscape are underpinned by roll-up opportunities, long-term recession-proof contracts, and scarcity in the form of limitations on permits or access to high-demand recycled materials.
The demand for voluntary carbon offsets is set to increase by 25 or more per year through 2030. Nature-based credits should continue to dominate the market because of their maturity and the increasing focus on co-benefits. Although supply will grow significantly, a supply gap is likely in the mid-2020s, leading to price opportunities. Multiple market frictions currently make the market inefficient, creating opportunities for technology solutions and services that address these challenges.
Nature-based solutions and carbon markets
Distributed energy resources encompass generation, storage, and efficiency technologies spanning residential and commercial/industrial segments. The space is growing rapidly in response to new technology, lower costs, favorable policies (including several relevant IRA incentives), and greater focus on sustainability and resilience. Historically siloed business models are converging through software and analytics, shifting competitive dynamics and creating new value pools.
Distributed energy and efficiency
Grid renewables and storage are set for rapid growth over the coming decade. In the US, IRA and IIJA tax credits, along with renewable power standards in 36 states, could shift generation to 65%–80% renewable by 2030 and increase nonresidential storage by 40X–50X. Significant investment in transmission infrastructure—as well as in generation and storage—will be needed to alleviate interconnection bottlenecks. The industry faces compressing returns, but these challenges also create opportunities to invest in technology and services that optimize performance.
Grid renewables and storage
RNG is produced through anaerobic digestion of organic feedstocks to produce biogas, which is then filtered to remove impurities and upgraded to methane. Upgrading allows direct injection of the final product into existing natural gas infrastructure. In North America, IRA investment tax credits of up to 50%, LCFS and RIN credit programs in the US and Canada, and cost recovery mechanisms for utilities are expected to drive strong growth through 2040. Even so, market expected to remain supply-constrained, creating pricing opportunities.
Renewable natural gas
Sustainable fuels are hydrocarbons made from organic waste (biofuels) or from H and CO
(e-fuels) as replacements for fossil fuels. Biofuels are the more established category and offer the only at-scale solution for decarbonizing modes of transportation that cannot be electrified. These fuels have strong policy support, including a $6 billion allocation under the IRA, the adoption of LCFS in a growing number of US states and in Canada, and the likelihood that US federal RFS will drive strong subsector growth through 2030.
Sustainable fuels
Low-carbon hydrogen (H ), a crucial decarbonization lever for many sectors, is expected to show sustained double-digit growth through 2050 in North America. In the near-term, IIJA funding of $8 billion for six to ten regional hubs and the IRA’s production tax credit of up to $3/kg are likely to drive a sharp increase in projects. Although project economics should improve over time, early movers can gain an advantage by securing favorable production locations, rights-of-way for transport, and scarce geological storage.
Low-carbon hydrogen
2
2
2
Extensive use of CCUS and DAC to capture and offset emissions from hard-to-abate sectors is crucial to meeting decarbonization goals. The North America market is poised for rapid acceleration in these areas, as government incentives unlock project viability. In the US, the IRA increased the §45Q tax credit to $85 per ton for storage and $60 per ton for utilization, driving a step change in the volume of “in-the-money” emissions to more than 300 megatons—15 times the US’s current capacity.
CCUS and DAC
Select an opportunity
to get started
Select an opportunity
to get started
Select an opportunity
to get started
Select an opportunity
to get started
Select an opportunity
to get started
Select an opportunity
to get started
Select an opportunity
to get started
Select an opportunity
to get started
Description
Description
Description
Description
Description
Description
Description
Description
Description
Description
Description
Description
Description
Description
Description
Description