Aon launches comprehensive carbon capture and storage insurance solution

Aon has developed a new insurance product for international transport and storage companies engaging in storing carbon dioxide.

According to the firm, this new product will provide cover for key risk exposures associated with Carbon Capture and Storage (CCS).

It is also aimed at advancing the role of insurance in de-risking global CCS projects, which will reportedly open up access to capital providers and investors; address a significant protection gap for these developments; and change the perception of what is insurable.

“Carbon Capture Utilisation and Storage addresses aspects of environmental, social, and governance (ESG) by reducing carbon emissions and allowing energy and other emitting industries to meet their net zero goals and objectives,” Aon explained.

The firm added that its energy transition product was created through its role as an insurance broker to Eni UK, the lead company in the consortium delivering the innovative low carbon and hydrogen HyNet North West project, and the Northern Endurance Partnership (NEP), comprising of bp, Equinor, and TotalEnergies.

Aon continued, “This project is among the first large commercial-scale and complete carbon transportation and sequestration processes for capturing, removing and storing industrial carbon dioxide emissions – which is key to the decarbonisation of the UK’s industrial heartland.”

William Lynch, business leader for natural resources at Aon, commented, “Carbon capture is a fundamental component in reducing emissions and supporting the energy transition. While challenges remain, this is a first-of-its-kind risk transfer solution, aimed at providing comprehensive cover under an agreed policy wording, for transport and storage companies engaged in CCS.

“Cover spans the construction and repurposing of existing assets as well as the operational phase. A huge benefit for operators and their investors, as well as their customers, is knowing what their insurance costs and coverage will be in an otherwise uncertain market.

“Aon has spearheaded the development of this product over the last 18 months, working in collaboration with leading underwriters, and the legal community and we look forward to working on many similar projects.”

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