’This breakthrough shows how insurance helps unlock vital finance to drive the net zero transition,’ says chief executive

Howden has launched a “first of its kind” carbon capture and storage (CCS) insurance facility in a bid to support the transition to net zero.

In a statement released today (29 January 2024), Howden explained the facility will provide cover for environmental damage and loss of revenue arising from the sudden or gradual leakage of CO2 from CCS projects into the air, land and water. 

This includes balance sheet protection through structured risk transfer solutions and cover for liabilities arising from carbon credits and allowances.

In turn, Howden hopes the facility will reduce risks associated with CCS technology.

It will be led by Glenn O’Halloran, executive director of Howden climate risk and resilience.

Rowan Douglas CBE, chief executive of Howden climate risk and resilience, said: “This breakthrough shows how insurance helps unlock vital finance to drive the net zero transition at the scope and speed required.

”By improving the bankability of critical CCS projects, we are establishing insurance as a force for good.”

Commercial market

This came after the  Carbon Capture And Sequestration Market Size, Share and Trends Analysis Report by 2030, published in May 2023, highlighted that the global market for capturing and storing carbon was predicted to grow at a rate of 19.9% each year, reaching $7.49bn (£5.9bn) by 2030.

Howden said the reported highlighted the need for reliable insurance to protect the finances and stability of carbon capture projects.

It hopes its new facility supports the development of a commercial insurance market for leakage risk.

Several markets within Lloyd’s have pledged their support for the insurance facility and additional capacity is expected to be provided to meet global commercial demand.

John Neal, chief executive of Lloyd’s, said Howden’s solution was developed in partnership with the insurance task force of the sustainable market’s initiative.

“This new insurance facility is an example of what can be achieved when innovative minds join forces to support climate positive solutions in our market,” he added.

“We hope together we can spark more cross-sector collaboration that will enhance our resilience against the climate crisis.”