
Hannah Jennings
Senior Vice President and CCS Working Group Lead, Energy and Power
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United Kingdom
Carbon Capture and Storage (CCS) is a multi-step process to reduce CO₂ emissions. It typically involves capturing CO₂ from various industrial sources like power plants or cement works, transporting it via pipelines or ships, and storing it underground in geological formations. Through this final storage, CCS enables a broad range of hard-to-abate sectors to reduce the carbon footprint of their products.
While CCS projects present opportunities, they also bring new risks and new financial security requirements. The infographic below illustrates a typical commercial CCS value chain and lists some of the risks and solutions at various stages.
The interconnected but separate parties within the removal chain adds complexity to the contracting regime that is in its early phase of development. Marsh can help you evaluate your existing insurance programme against those risks identified, and use that knowledge to unlock valuable, laser-focused solutions.
We consider three specific loss scenarios below, illustrating where traditional risk transfer solutions may need to be expanded to cater for certain risks.
The blending of CO₂ streams from different industries creates a challenge for the transport and storage infrastructure they share. Typically there is a wide variance in CO₂ concentration which can be accompanied by a range of impurities.
Alongside the physical risks posed by inconsistent CO₂ streams, there is a serious economic impact even in the event the CO₂ hasn’t caused physical damage: once revealed to be off-spec, the entire system may need to be vented to avoid causing damage up the chain. Depending on the geography of the project, this could result in:
Conventional insurance (in the case of physical damage):
Where there is no damage, Marsh can work with you to mitigate additional costs with solutions such as:
In partnership with HDI Global, Marsh has launched a new insurance product designed to cover this specific risk in interdependent CCS value chains. This innovative solution can provide:
For an insured found to have contributed off-spec CO₂, coverage for:
a. Carbon credits losses of co-emitters.
b. Other financial losses incurred by co-emitters.
c. Remediation and decontamination costs for the facilities involved.
Our Engineers and Advisory experts can support your business with risk mitigation measures such as reliable metering and sampling at appropriate locations.
Another potential risk scenario is CO₂ leaking from the geological storage complex, which can cause financial loss and introduce further complications for Operators:
The liability for the storage site (held by the Operator) extends beyond the operational phase of the store, often extending to 20+ years post closure.
Where conventional insurance cannot cover the risks, innovation is needed:
No matter your business’ role in the value chain, insurance solutions can play a critical role in managing the multifaceted risks associated with CCS projects by addressing technical, financial, and environmental challenges. Our placement specialists advise on insurance policies that can help your business mitigate risks along the entire CCS lifecycle and provide financial security and regulatory and stakeholder confidence.
As the drive to decarbonise accelerates, carbon capture and storage (CCS) has been identified as a vital tool in supporting the global transition to a lower-carbon economy.
Senior Vice President and CCS Working Group Lead, Energy and Power
United Kingdom
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Article,Featured insight
19/02/2025
This publication is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. The information contained herein is based on sources we believe reliable, but we make no representation or warranty as to its accuracy. Marsh shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting, or legal matters are based solely on our experience as insurance brokers and risk consultants and are not to be relied upon as actuarial, accounting, tax, or legal advice, for which you should consult your own professional advisors. Any modelling, analytics, or projections are subject to inherent uncertainty, and any analysis could be materially affected if any underlying assumptions, conditions, information, or factors are inaccurate or incomplete or should change.
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