Report examines insurance barriers to CCS investment.
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.
Shared infrastructure complicates risk
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.
Long-term liabilities create uncertainty
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. It is shaped by how risks are understood, managed and allocated.”
To navigate this, the authors argue that governments have a role in establishing predictable rules for permitting, closure, financial assurance and the eventual transfer of stewardship responsibilities. Early involvement from insurers and other financial stakeholders could also help developers address risks before project structures and contracts are finalized.
Insurance alone cannot solve the problem
The report does not suggest that every CCS exposure can be insured. Instead, it calls for different tools to address different risks, including operational controls, contractual arrangements, insurance, financial guarantees and targeted public support.
The recommendations come as the global project pipeline expands. The Global CCS Institute reported 77 commercial CCS projects operating worldwide in its 2025 assessment, alongside 47 under construction and hundreds more in development. However, projects still face barriers involving policy, financing and infrastructure.
The new principles are non-binding and do not represent a commitment by participating organizations or their members to insure or finance specific projects. As Bjørn Otto Sverdrup, Chair of OGCI’s Executive Committee, emphasizes, enhanced risk management approaches are vital to “build confidence, unlock investment and accelerate deployment” as large-scale projects shift from concept to execution.
source: carbon herald
