Companies installing carbon capture3/21/2024 ![]() These targets aim for a 20 percent reduction of CO 2 per metric ton of cement and a 25 percent reduction of CO 2 per cubic meter of concrete by 2030 compared to 2020 levels. The cement and concrete industry has established new targets to lower and even eliminate emissions, such as those set by the Global Cement and Concrete Association (GCCA). How players in the cement ecosystem combine and balance these solutions will likely determine the decarbonization trajectory of the industry as well as which players will gain competitive advantage over time. This article outlines some of the solutions that hold the most promise for decarbonization-including lower-carbon clinker, admixtures, innovative cementitious materials, and materials circularity-and the factors to consider when making green investments and building business models around them. For more, see Building value by decarbonizing the built environment, McKinsey, June 2023. For example, there is an overarching solution of reducing the overall need for materials-and thereby the embodied emissions-in the built environment through designs and specifications that are less materials-intensive. But of course, there is a broad set of solutions for the net-zero transition beyond changes in cement. 3 In this article, we have focused on the cement industry. But players must act strategically to come out on top in a shifting market. As new business models emerge, players and providers of different solutions are expected to compete for market share.įor cement players looking for a place in a net-zero future, low-carbon offerings will be key to success. However, these solutions will significantly shift value within the industry. Novel decarbonization solutions are emerging, from new applications of carbon capture, utilization, and storage (CCUS) in clinker production to innovative materials and other cementitious solutions. 2 Thomas Czigler, Sebastian Reiter, Patrick Schulze, and Ken Somers, “ Laying the foundation for zero-carbon cement,” McKinsey, May 14, 2020. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.This article is a collaborative effort by Fabian Apel, Johanna Hoyt, Francisco Marques, Sebastian Reiter, and Patrick Schulze, representing views from McKinsey’s Materials Practice.īut cement is particularly difficult to decarbonize, because it directly releases CO 2 in chemical processes during its production. On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. With a strong backlog and high financial flexibility, the company is positioned to make aggressive investments in emerging areas like carbon capture. ![]() Revenue is impressive, with Fluor reporting an order backlog of $26 billion across businesses in Q3 of 2023. So, Fluor will leverage on its technology to seek further growth in the carbon capture business. ![]() Notably, FLR’s technology has is already being used in 30 facilities over the last few decades. In the partnership, Fluor will be providing its proprietary Econamine FG Plus carbon capture technology. In June, Fluor and Carbfix announced a collaboration to pursue integrated carbon capture and storage ( CCS) solutions. With FLR stock trading at a forward price-earnings ratio of 14.4, it seems like a good accumulation opportunity. However, the energy solutions segment is involved in business that include carbon capture, renewable fuels, waste-to-energy, among others. Let’s discuss three names that look attractive.įluor Corporation (NYSE: FLR) is an engineering, procurement, and construction company. Over a five-year horizon, a few multibagger stocks are likely from the sector. The multi-fold growth in CO2 capture will translate into strong revenue and cash flow upside for the best carbon capture companies. Therefore, robust growth visibility exists even beyond the decade. It’s expected that by 2030, CO2 being captured will increase to 279 million tons, accounting for just 0.6% of today’s emissions. This makes a strong case for investing in some of the best carbon capture stocks.Īnd, with growth potential, the amount of CO2 being captured today is 43 million tons. According to the International Energy Agency, “ 40 commercial facilities are already in operation applying carbon capture, utilization and storage.” Further, growth estimates for the industry are optimistic through the decade. If we look at some of the major trends towards decarbonization, carbon capture is becoming increasingly relevant. InvestorPlace - Stock Market News, Stock Advice & Trading Tips
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