What is the product?

In order to achieve Paris aligned climate goals, it is expected that we will need to use carbon capture and storage (CCS) technology. CCS is where carbon dioxide that is produced by large industrial or power plants is captured, compressed for transportation, and then injected deep into a rock formation for permanent storage. The carbon stored has an economic value and some operators are concerned about the economic (and environmental) impact of a loss of containment, as well as the cost to reinstate containment.

This is a relatively new risk area and Marsh has developed insurance for these activities as well as for the loss of the value of the carbon captured if there is a failure of containment.

How does it support green outcomes?

CCS is widely seen to be key to achieving net-zero. There are technical, as well as economic challenges to overcome to enable the widespread adoption of CCS. However, many operators are relying on the availability of insurance to help manage the risk. This insurance product can be part of the risk mitigation strategy, and so support accelerated development of the sector.

How does it enable customers today?

North Sea operators have been exploring the viability of carbon capture and storage, beyond injection wells. Marsh has developed long-term insurance structures for the operation and maintenance of the infrastructure as well as for the economic value of the stored carbon following a loss of containment as and when projects are commissioned.