Four demand insurer’s carbon capture and storage cover
Swiss insurer Zurich is processing four requests from companies for carbon capture and storage (CCS) insurance cover, Reuters reports.
Chief climate product officer Lindene Patton said that companies in Europe, United States, Australia, China and Japan were also expressing interest in the cover.
Patton would not reveal the companies involved and said it was too early to reveal the cost of any potential policies.
Launched in January
Zurich launched two insurance products in January to cover liabilities during the operational life of CCS facilities and funding for after the plants close.
"So much coal is burnt that in the absence of CCS we will not meet the 2050 reduction goals. Without insurance, even if companies get subsidies, we won't get a deployment of the technology," Patton said.
"Operators need certainty. It is difficult as a business person to make any long-term investment decisions unless you have certainty about the costs of risks," John Scott, head of risk insights at Zurich Global Corporate, said.
Long-term liabilities
"There is a 'fog of war' surrounding the actual risks of CCS," Scott said. "Actually, the most challenging thing is what happens beyond 50 years or when a storage site is sealed. Who then bears the risk?" Scott said.
Zurich Financial, together with a Carbon Capture and Storage Association risk group, suggest a safety or permitting authority that would safely site CCS reservoirs and a long-term funding mechanism in the case of CO2 loss from sealed sites.
"No amount of insurance will make a bad site good. But we want to make sure we identify sites which have the greatest compatibility with geo-chemistry so there is the greatest likelihood of success," Patton said.
