By Rebecca Stone

Three international energy and insurance bodies released four risk-allocation principles in October for carbon capture and storage projects, identifying insurability as the gating factor for the next investment cycle. The Oil and Gas Climate Initiative (OGCI), the Geneva Association and the Clean Energy Ministerial CCUS Initiative published "Enhancing the Insurability of Carbon Management Projects" as the Global CCS Institute's 2025 assessment counted 77 commercial facilities in operation and 47 under construction worldwide. Hundreds more sit in earlier development.

The document outlines four guiding principles:

• Cross-sector collaboration
• Clear regulation
• Assessment of the entire value chain
• Explicit risk allocation

Each principle targets a different breakdown point in project finance.

What does the report recommend?

The authors call for insurers, governments and developers to coordinate early in project design rather than after contracts are signed. Early involvement allows underwriters to flag exposures while structures remain negotiable. The report treats insurance as one tool among several, alongside operational controls, contractual arrangements, financial guarantees and targeted public support.

The authors do not claim that every CCS exposure can be insured. Some risks may remain uninsurable by design. The report instead argues for matching each exposure to the cheapest credible bearer of that risk, whether a developer, a network operator, a government backstop or an insurer.

What makes CCS hard to insure?

Two structural features drive the problem. The first is interconnection. Networks linking multiple industrial emitters to common pipelines, transport systems and geological storage sites can offer economies of scale, but they also produce losses that do not trace cleanly to a single insured event. A disruption at one facility can cascade through delays, capacity constraints or contractual disputes across a connected network, raising questions about policy triggers and proximate cause.

The second is duration. Monitoring, reporting, maintenance and financial assurance requirements can continue for years or decades after carbon injection stops. Such obligations extend past conventional policy periods, leaving residual liability in legal limbo. Governments, the authors say, must define predictable rules for permitting, closure, financial assurance and the eventual transfer of stewardship to a public or private entity capable of carrying it.

Maryam Golnaraghi, Director of Climate Change and Environment at the Geneva Association, framed the issue as one of allocation rather than product availability. "Insurance can play an important role in supporting emerging risks of carbon management value chains to scale projects," she said, "but insurability depends on more than the availability of insurance products. It is shaped by how risks are understood, managed and allocated."

What changes next?

The principles are non-binding. They commit none of the three organizations or their members to insure or finance any specific project. Their value, the authors argue, lies in establishing a common language for project sponsors, underwriters and regulators ahead of construction decisions.

Bjørn Otto Sverdrup, Chair of OGCI's Executive Committee, said enhanced risk management approaches are vital to "build confidence, unlock investment and accelerate deployment" as large-scale projects shift from concept to execution.

The report arrives as projects still face barriers involving policy, financing and infrastructure. The 2025 Global CCS Institute assessment counts hundreds more facilities in development beyond the 47 under construction.

The next milestone is uptake. Investors and underwriters will judge the framework against actual policy offerings, completed project closures and any government rules on long-term stewardship transfer. Until then, the report's four principles remain an industry-position document, not a financing mechanism.