UK-based insurance coverage firm Howden has launched an insurance coverage facility to cowl carbon dioxide (CO₂) leakage from commercial-scale CCS services.
Reputed to be the primary of its form, the brand new providing is alleged to drive the shift in direction of net-zero emissions.
The insurance coverage product, developed by Howden and led by SCOR’s syndicate at Lloyd’s, provides protection for environmental injury and income loss ensuing from each sudden and gradual CO₂ leakage from CCS initiatives into the air, land and water.
This insurance coverage resolution performs a essential position in supporting the mitigation of the dangers linked to CCS expertise.
Moreover, the ability is anticipated to assist within the emergence of a devoted insurance coverage marketplace for leakage dangers.
This particular want was outlined by the UK Authorities Division for Power Safety & Web Zero in its Enterprise Mannequin for Carbon Seize, Utilization and Storage.
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A number of markets inside Lloyd’s have pledged assist for the ability, with expectations of further capability to fulfill world industrial demand.
Howden Local weather Danger & Resilience govt director Glenn O’Halloran will spearhead the initiative.
CCS initiatives’ monetary feasibility typically hinges on revenues derived from voluntary and compliance carbon markets, said Howden.
This new insurance coverage providing safeguards in opposition to liabilities linked to carbon credit and allowances, encompassing UK and EU Emissions Buying and selling System liabilities.
Howden’s introduction of this insurance coverage facility follows the 2022 launch of the world’s first carbon credit score invalidation insurance coverage resolution.
Howden Local weather Danger and Resilience CEO Rowan Douglas stated: “This breakthrough exhibits how insurance coverage helps unlock very important finance to drive the net-zero transition on the scope and velocity required.
“By bettering the bankability of essential CCS initiatives, we’re establishing insurance coverage as a pressure for good and constructing on the work being accomplished by the Sustainable Markets Initiative (SMI) to grasp the potential of engineered carbon elimination options and transfer this nascent sector into the mainstream.”
The newest growth comes shortly after the corporate’s acquisition of Scottish private and industrial strains dealer Laurie Ross, which considerably strengthened its excessive avenue presence.