Pioneer behind landmark Scottish carbon capture and storage project wins backing from investment giant
A carbon capture and storage pioneer that plans to complete landmark developments in Scotland has won a valuable vote of confidence from a pensions and investments giant.
Storrega Geotechnologies has secured investment from M&G as the company prepares to enter a crucial stage in its development.
Storrega is in the detailed design stage of work on the flagship Acorn project, which it hopes could provide a model for how carbon capture and storage technology could be used to help reduce emissions.
Acorn will involve collecting carbon dioxide emissions from industries across Scotland for storage in depleted North Sea reservoirs.
With the start of operations targeted for the mid 2020s, Acorn could be a world first in terms of large-scale CCS facilities.
Storrega thinks the model could be rolled out around the world.
READ MORE: Carbon capture pioneer says Scotland could lead world in key industry
The company is also working on plans to develop a Direct Air Capture (DAC) plant that would remove emissions from the atmosphere, which it expects will be built in North East Scotland.
M&G’s decision to invest in Storrega reflects its confidence in the potential of the company’s technology and its commercial prospects.
Alex Seddon of M&G’s investments business said: “We believe that Storegga’s approach to carbon capture offers a responsible, pragmatic solution to help reduce carbon levels in the atmosphere and limit the damage to our planet from global warming, and in time will generate steady income streams to benefit our customers.”
M&G’s move comes months after Storrega won backing from three giants based overseas. Australian investment bank Macquarie became a shareholder in Julty last year. Singapore sovereign wealth fund GIC and Japanese industrial giant Mitsui followed suit in March.
In April Royal Dutch Shell and private equity-backed Harbour Energy became equal partners in the Acorn project with Storrega.
READ MORE: Storrega eyes locations in Aberdeenshire for flagship plant
Earlier this month Grangemouth refinery owner Ineos signed a memorandum of understanding with the Acorn project to work together to develop a carbon capture and storage system covering the site.
Storrega chief executive Nick Cooper yesterday underlined his belief that the company could play an important role in the development of approaches to emissions reduction that could be applied around the world and of related commercial frameworks. He has noted that demand for the services of Acorn would be stimulated by the development of carbon pricing mechanisms that provide incentives for firms to pay to have their emissions dealt with.
“As a major UK institutional investor, M&G’s investment strengthens our ability to develop carbon reduction and carbon removal projects globally and will help shape Storegga into a leading, independent, UK-based carbon reduction company,” said Mr Cooper.
He added: “At Storegga, we believe that safe, accessible CO2 storage sites are the foundation that enables a system of related carbon reduction and removal activities. Establishing CO2 transportation and storage infrastructure, enables a host of other decarbonisation opportunities such as importing CO2 from other regions, low carbon hydrogen generation and the negative carbon activity of DAC.”
Mr Cooper has said Storrega could help to make Scotland a global leader in the emerging carbon capture and storage industry. He reckons its projects could generate significant numbers of jobs in the supply chain.
READ MORE: Vote of confidence in Scotland from pensions giant
M&G said it made the investment in Storrega through the £143 billion Prudential With-Profits Fund it manages on behalf of over five million policyholders.The investment was made by M&G’s Catalyst team, which the company said is investing up to £5 billion into privately-owned innovative enterprises working to create a more sustainable world.
M&G’s investments arm is based in London but the group employs around 1,300 people in total in Stirling and Edinburgh in areas ranging from pensions administration to digital technology.
M&G includes UK and European pensions businesses operated under the Prudential brand. It was demerged in 2019 from Prudential’s operations focused on Asia, the US and Africa.
Rival pensions giant Legal and General has also portrayed itself as an investor in positive change.
The company says its purpose is to improve the lives of its customers, build a better society for the long term and create value for its shareholders.
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