Carbon sequestration: Transitioning to net-zero

Every day, news outlets publish reports about the looming threat of global warming. According to experts, this issue can be partly mitigated by achieving net-zero greenhouse gas emissions by 2050. But for some enterprises, this may seem like an insurmountable task.

Carbon sequestration is a solution.

The “what” and “why” of carbon sequestration

Carbon sequestration describes the process of capturing and storing carbon dioxide, the most produced greenhouse gas, to limit its presence in the atmosphere and combat global warming.

For industries that cannot immediately switch to an alternative source of energy, carbon sequestration enables them to continue to operate without producing and releasing massive amounts of carbon dioxide.

The business benefits of carbon sequestration

While the primary goal of carbon sequestration is to combat the effects of climate change, it offers other benefits, including:

Tax credits. In 2022 the US government supercharged tax credit 45Q, effectively increasing the value of captured CO2 from $50 per ton to $85 per ton – a 70 percent change.

Driving new business. Some state and federal departments prioritise working with low-carbon providers, so carbon emission statistics can function as a key differentiator for decision-makers. In the B2C realm, consumers more regularly consider the social and environmental practices of a product or service when making buying decisions.

Ironshore is your partner to help mitigate potential exposures

Carbon sequestration is not without risk. It necessitates years of investment, including renovating facilities so they can capture and liquify CO2, building pipelines for the transport of liquid CO2 and securing proper carbon storage sites.

Site selection is a critical consideration, as accidental geological disruption can lead to carbon’s release back into the atmosphere, which could be considered a pollution incident.

At Ironshore, our environmental team has the capabilities, nimbleness and flexibility to support this growing market – we have flexibility in our policy forms to handle the exposures and are working with many of our clients to help.

We have a broad appetite for this business within both our SPILLS and CELL product lines from construction through operational phases. This could include standard pollution cover, financial assurance and 45Q tax credit cover.

We are proud to have won the “Innovation in E&S” award at the 2023 E&S Insurer Conference and Awards for our first-to-market carbon sequestration solution.

Learn more about Ironshore’s environmental insurance solutions and carbon sequestration here.

Ironshore, a Liberty Mutual Company, provides broker-sourced specialty property and casualty insurance coverages for varying risks located throughout the world.

The Liberty Mutual group of companies is rated A (Excellent) by A.M Best and A (Strong) by Standard & Poor’s. For more information, please visit: www.ironshore.com.

This document provides a general description of this program and/or service. Not all insurance coverages or products are available in all states or regions and policy terms may vary based on individual state or region requirements. See your policy, service contract, or program documentation for actual terms and conditions.

Some policies may be placed with a surplus lines insurer. Surplus lines insurers generally do not participate in state guaranty funds and insureds are therefore not protected by such funds. Coverage may only be obtained through duly licensed surplus lines brokers.

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