SCOR Syndicate is leading a new insurance facility specifically for commercial-scale carbon capture and storage (CCS) facilities, developed by global insurance group Howden.
The facility offers comprehensive coverage against environmental damage and potential revenue loss due to the sudden or gradual leakage of CO2 from CCS projects. The coverage extends to leakages impacting the air, land, and water, thereby addressing a fundamental risk associated with CCS technology.
The creation of this insurance facility also aligns with the UK Government Department for Energy Security & Net Zero’s emphasis on the necessity of a commercial insurance market for leakage risk in CCS projects.
SCOR’s involvement marks a significant step in supporting the development and implementation of CCS technology, it stated.
The financial stability of CCS projects is often contingent on revenue from voluntary and compliance carbon markets. Recognizing this, the insurance facility covers liabilities related to carbon credits and allowances, including those under the UK and EU Emissions Trading Systems (ETS).
This development follows Howden’s introduction of the world’s first carbon credit invalidation insurance solution in 2022.
“We are delighted to lead this facility, which is evidence of the innovative risk transfer solutions that can be brought to market when the best minds across the industry work together to de-risk the global energy transition. Furthermore, it fully supports SCOR’s target to multiply insurance and facultative reinsurance coverage for low carbon energy by 3.5 by 2030. We look forward to working with Howden and the market to boost investor and lender confidence in CCS projects,” SCOR Specialty Insurance CEO Romain Launay and SCOR Syndicate CUO Marie Biggas said.
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