Japan’s Dai-ichi Life backs world’s first Carbon Capture Bond

A Japanese life insurer has stepped into uncharted territory for sustainable finance, backing the world’s first corporate bond dedicated solely to carbon capture and storage.

Dai-ichi Life Insurance said it invested about ¥4.7 billion ($30 million) in a bond issued by the Port of Rotterdam Authority, Europe’s largest port operator. The deal is notable not just for its scale but for its structure: proceeds are ringfenced exclusively for carbon capture and storage, or CCS. Dai-ichi Life is the largest investor in the issuance and worked alongside HSBC and the port authority to shape the transaction.

“Many of our investments directly reduce CO2 emissions, such as the construction of the CO2 pipeline infrastructure for the Porthos CO2-transport and storage project. Our collaboration with Dai-ichi Life enables us to realise these kind of decarbonisation projects and build a future-proof port,” said Vivienne de Leeuw, CFO at the Port of Rotterdam Authority.

HSBC served as Sustainability Structurer and Joint Placement Agent for the bond, playing a role in shaping a financing structure in which proceeds are allocated exclusively to carbon capture and storage projects.

According to the parties involved, this use-of-proceeds framework marks the first time a corporate bond has been issued with funding dedicated solely to CCS activities, reflecting growing investor interest in targeted climate-transition instruments and the development of new financing models for emissions-reduction infrastructure.

Carbon capture bond to support Europe’s CO2 infrastructure buildout

The funds will support Porthos, a shared CO2 transport and offshore storage system serving the Rotterdam industrial cluster. The project is designed to collect emissions from refineries, chemical plants and blue hydrogen facilities, moving the carbon dioxide via pipeline to depleted gas fields beneath the North Sea.

At full operation, Porthos aims to store roughly 2.5 million tonnes of CO2 a year for 15 years, with capacity to expand as additional projects come online.

European policymakers see CCS as essential for sectors where emissions are hard to eliminate. The EU has set a target of storing 50 million tonnes of CO2 annually by 2030, and Rotterdam is positioning itself as a central hub.

In Japan, interest in carbon capture is also building. With limited domestic storage options, Japanese companies and investors are exploring overseas projects, shipping-based CO2 transport and regional storage partnerships. Institutional capital, including from insurers, is increasingly viewed as critical to scaling CCS and meeting long-term net-zero goals.

source: carbon herald