The new Carbon Cancellation Insurance protects purchasers against risks if purchased carbon credits are canceled or nullified due to political risks such as regulatory changes, or negative weather events impacting carbon projects.
George Beattie, (pictured) Head of Innovation at CFC, commented: “While more and more businesses invest in the voluntary carbon market as part of their efforts to offset their carbon footprints, their stakeholders are looking for financial certainty on these investments.”
“Our new Carbon Cancellation Insurance delivers that certainty and represents a further step forward by the insurance industry to facilitate risk transfer in order to help galvanize quality growth in the voluntary carbon market,” Beattie added.
The policy also protects against the revocation of Article 6 transfer eligibility and loss of eligibility under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
The policy covers the buyer’s entire investment and includes support for negative media and crisis management if projects are canceled. Through the new product, CFC is extending its support to both forward financing of carbon projects and the associated risks with issued credits.
Beattie went on to say: “Together with our groundbreaking Carbon Delivery Insurance product launched in March this year, CFC is the first insurer to offer both a delivery and cancellation insurance product to buyers of voluntary carbon credits. This means we are supporting both forward financing of prestigious carbon projects and the risks associated with issued credits purchased and retired by companies in pursuit of net zero.”
Carbon Cancellation Insurance follows CFC’s recent launch of Carbon Delivery Insurance, a policy which safeguards businesses when purchasing voluntary carbon credits in advance.
