Friday, January 23, 2009

Zurich unveils carbon capture and storage insurance

Environmental Finance: Zurich Financial Services has launched insurance products to cover capturing and storing carbon underground, in a bid to address a major barrier to the uptake of the technology. Many believe that carbon capture and storage (CCS) will be an invaluable weapon in the fight against climate change – and governments around the world are promising billions in subsidies and incentives to develop the technology, particularly to capture carbon from fossil-fuelled power stations. However, industry, government and environmentalists have expressed concerns about the long-term liabilities posed by the technology, which will require carbon to be permanently stored underground.

Zurich has launched two products, “designed to meet the unique insurance needs of CCS projects from design over operational phases through to closure and post-closure events at the geologic storage sites”. The company’s Carbon Capture and Sequestration Liability Insurance to cover liabilities from pollution events, business interruption, control of the well, liabilities relating to the transmission of carbon, and geomechanical liabilities, predominantly during the operational life of the storage facilities.

Its Geologic Sequestration Financial Assurance, however, is designed to run for some decades after the closure of the facility. It includes funding to close the covered well or wells, as well as to monitor the storage of carbon after closure.

A coal mine in Wyoming, US Bureau of Land Management

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