Carbon capture and storage (CCS) has been gaining attention as a tool for cutting industrial emissions, but the financing and insurance needed to expand it remains a challenge.
A new report on carbon management projects, published in October by the Oil and Gas Climate Initiative (OGCI), the Geneva Association and the Clean Energy Ministerial CCUS Initiative, identifies insurability as a key factor in making projects more attractive to investors. Its recommendations focus on improving how risks are identified, allocated and managed across the carbon capture value chain.
The report, Enhancing the Insurability of Carbon Management Projects, highlights how the industry is moving beyond individual facilities toward networks linking multiple industrial emitters with shared pipelines, transport systems and geological storage sites.
These interconnected arrangements can offer economies of scale, but they also create dependencies between companies. A disruption at one facility, for example, can affect other participants through delays, capacity constraints or contractual disputes. Traditional insurance policies may not readily cover the interconnected exposures of carbon capture unless losses can be linked to clearly defined events.
The report groups its recommendations around four guiding principles: cross-sector collaboration, clear regulation, assessment of the entire value chain, and explicit risk allocation.
Storage obligations present another challenge. Monitoring, reporting, maintenance and financial assurance requirements can continue for years or decades after carbon injection stops. Such obligations may extend beyond conventional insurance policy periods, complicating decisions about who bears the remaining liabilities.
As noted by Maryam Golnaraghi, Director of Climate Change and Environment at the Geneva Association, “Insurance can play an important role in supporting emerging risks of carbon management value chains to scale projects, but insurability depends on more than the availability of insurance products.
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