Howden has launched a first-of-its-kind insurance facility covering the leakage of carbon dioxide from commercial-scale carbon capture and storage facilities.

Led by SCOR’s syndicate at Lloyd’s, the facility provides 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.

Other following markets within Lloyd’s have committed to support the facility, with further capacity anticipated to meet commercial demand globally.

Led by Glenn O’Halloran, executive director, Howden Climate Risk & Resilience, it is Howden’s second solution designed to support the growth of the global carbon market; after the 2022 launch of the first carbon credit invalidation insurance solution.

Rowan Douglas CBE, CEO, 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 and building on the work being done by the Sustainable Markets Initiative (SMI)3 to realise the potential of engineered carbon removal solutions and move this nascent sector into the mainstream.”

Romain Launay, CEO, SCOR Specialty Insurance and Marie Biggas, CUO, SCOR Syndicate added: “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.”

The global carbon capture and sequestration market is projected to reach a value of £5.91bn by 2030 at a CAGR of 19.9% between 2023 and 2030, accelerating the need for effective insurance solutions to protect the financial viability and stability of CCS projects.

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