Underwriting Environmental Risks for Carbon Capture Usage and Storage (CCUS) Coverage: Challenges and Best Practices Forward

The Paris Agreement on climate change is calling for mitigating techniques, such as carbon capture, use, and storage (CCUS) to reduce carbon emissions. Insurance can help carbon (CO2) mitigation and promote the tackling of the pace of acceleration of climate change. This chapter proposes to examine the international environmental law regime and the contribution of CO2 capture to the resolution of the climate change problem and to evaluate the role of insurance for CCUS technology and consider parameters of insurance coverage in terms of CCUS, as such coverage. The provision of adequate insurance cover will allow a real expansion in the deployment of the CCUS technology at a large scale. It will assess new solutions in insurance products for CCS coverage to offer guidance to the insurance market on how to obtain better coverage and to provide insurers with a window of opportunity to grow their product base and encourage lobbying efforts for legislation favorable to the insurance industry. Such enactment of specific further statutory regulations will offer great benefits to the insurance market and potential policyholders as it will provide benefits such as the lowering of the price of CCS liability insurance.