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📋 '''Carbon capture''' refers to a set of technologies designed to intercept carbon dioxide (CO₂) emissions at their source — typically industrial facilities and power plants — or directly from the atmosphere, and then transport and store or utilize the captured CO₂ to prevent it from contributing to climate change. For the insurance industry, carbon capture represents both an emerging class of insurable risk and a component of the broader [[Definition:Climate risk | climate transition]] that is reshaping underwriting portfolios, investment strategies, and [[Definition:ESG | ESG]] commitments across the sector. Insurers and reinsurers are increasingly called upon to provide coverage for carbon capture, utilization, and storage (CCUS) projects — covering construction, operational, [[Definition:Liability insurance | liability]], and long-term storage risks — while simultaneously evaluating how the success or failure of carbon capture deployment affects the systemic [[Definition:Climate risk | climate risks]] embedded in their own books of business.

⚙️ Insuring carbon capture projects involves a complex layering of coverage types. During the construction phase, [[Definition:Construction insurance | engineering and construction all-risks policies]] cover physical damage and delay. Once operational, [[Definition:Property insurance | property]] and [[Definition:Business interruption insurance | business interruption]] coverage protects against equipment failure or process disruption, while [[Definition:Liability insurance | third-party liability]] policies address risks such as CO₂ pipeline leaks, wellbore integrity failures, or induced seismicity from geological storage. The longest-tail and least-understood risk dimension is post-injection: once CO₂ is sequestered underground, questions of long-term containment, monitoring obligations, and liability for gradual leakage create exposures that may persist for decades or centuries — pushing insurers into territory more familiar from [[Definition:Environmental liability insurance | environmental liability]] and [[Definition:Nuclear insurance | nuclear insurance]] than from conventional energy coverage. Regulatory regimes governing storage liability vary significantly: the EU's CCS Directive transfers long-term liability to the state after a defined post-closure period, while frameworks in the United States, Australia, and other jurisdictions impose different allocation models, creating a fragmented landscape for insurers operating across borders.

🌍 Carbon capture's importance to the insurance industry transcends the direct underwriting opportunity. As a technology that could meaningfully reduce the pace of global warming, successful CCUS deployment has the potential to moderate the escalation of [[Definition:Catastrophe loss | catastrophe losses]] from climate-driven perils — hurricanes, floods, wildfires — that are already straining [[Definition:Reinsurance | reinsurance]] markets and widening the [[Definition:Protection gap | protection gap]]. Conversely, if carbon capture fails to scale as projected in many net-zero scenarios, the insurance industry faces amplified physical risks and potential asset impairment in its investment portfolios, particularly holdings linked to fossil fuel infrastructure. Major insurers and reinsurers — including [[Definition:Swiss Re | Swiss Re]], [[Definition:Munich Re | Munich Re]], and [[Definition:Lloyd's of London | Lloyd's]] market participants — have begun developing specialized CCUS insurance products and frameworks, recognizing that providing risk transfer solutions for climate transition technologies is both a commercial growth area and a strategic imperative for an industry whose long-term viability is inextricably linked to how effectively the world manages its carbon emissions.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Climate risk]]
* [[Definition:Environmental liability insurance]]
* [[Definition:Energy insurance]]
* [[Definition:ESG]]
* [[Definition:Transition risk]]
* [[Definition:Catastrophe loss]]
{{Div col end}}

Definition:Carbon capture - Revision history

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