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Carbon Credit Insurance

Carbon credit insurance solutions support the growth of the global carbon markets. Insurance can mitigate financial risks for buyers and sellers of carbon credits.

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Carbon markets can accelerate action to combat climate change. Carbon credits incentivize investment in projects that remove, reduce or avoid emissions (e.g., reforestation and direct air capture and storage projects), and trade in both the primary and secondary markets. Buyers, sellers and investors of carbon credits face numerous risks due to the rapid development of the carbon markets, multiple standards and the varied nature of projects.

Why insure carbon credits?

Enhances stakeholder confidence in carbon credits

Enhances stakeholder confidence in carbon credits

Provides increased lending capacity.

Provides increased lending capacity

Facilitates financing of carbon projects

Facilitates financing of carbon projects

Balance sheet protection

Balance sheet protection

Insurance solutions for the carbon market

Non-delivery risk

Non-delivery risk:

Cover for the prepayment amount against subsequent non delivery of the carbon credits. Policy indemnity can be in the form of carbon credits or financial compensation.

Political risk insurance

Political risk insurance:

Protection against the financial loss of carbon credits resulting from political risks including corresponding adjustment risks.

Non-payment insurance for banks and financial institutions

Carbon lender credit non-payment insurance:

Basel compliant credit non payment insurance which can help bank lenders achieve capital relief, through the use of AA-rated Lloyd’s paper.

Post delivery risks

Post delivery risks:

Financial protection against invalidation of carbon credits, non permanence and reversal events.

EU ETS and Fuel EU protect

EU ETS and Fuel EU protect:

Protection against risks of non payment and insolvency between counterparties linked to industries operating under compliance market schemes.

Why WTW?

  • Matching entrepreneurial developments with supporting insurance solutions
  • Access to specialist insurance markets globally — providing cost-effective solutions
  • Provider of climate risk solutions across many industries and geographies
  • Laser focus on providing consistently good service — from initial discussion through to support for claims when required

For smarter ways to manage carbon credit risks and opportunities, please get in touch.

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