CFC, a specialist insurance provider in emerging risks and cyber insurance, has launched its second insurance product for buyers of voluntary carbon credits.
The new Carbon Cancellation Insurance safeguards against financial and management risks if purchased carbon credits are cancelled or invalidated due to political risks such as regulatory changes or adverse weather events impacting carbon projects.
“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,” commented George Beattie, Head of Innovation at CFC.
“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 galvanise quality growth in the voluntary carbon market,” further added Beattie.
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).
It covers 100 percent of the purchaser’s investment and includes support for adverse media and crisis management in case of project invalidation. With this launch, CFC extends its support to both forward financing of carbon projects and the associated risks with issued credits.
Beattie continued: “Together with our ground-breaking 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.”
This launch comes shortly after CFC’s Carbon Delivery Insurance, a policy that addresses both the physical and political risks encountered by businesses purchasing voluntary carbon credits in advance.
