Insurance is seen as a key enabler of carbon capture and storage (CCS) projects, with nearly two-thirds of leaders relying heavily on insurance to manage risks, according to a recent analysis by Marsh Risk, a business of Marsh.
The analysis draws on insights from a survey of 504 senior UK-based CCS decision-makers covering the global CCS value chain.
The survey reveals that organisations recognise effective risk transfer as essential for meeting financial security obligations, securing project financing, and ensuring long-term viability.
Transport and storage operators are particularly likely to rely heavily on insurance, with 40% citing it as crucial, compared with just 26% of industrial emitters.
The findings also show that 39% of decision-makers consider long-term insurance policies essential for managing post-closure liabilities, with transport and storage operators especially likely to view this as critical (57%).
Andrew Herring, Global Chair of Energy and Power at Marsh Risk, said, “The data underscores the vital role insurance plays as a foundational enabler of investment, supporting the development of the CCS industry.
Encouragingly, 84% of respondents are confident that the insurance market has sufficient appetite and capacity to meet CCS risk transfer requirements.
However, engagement between risk, insurance, and technical teams remains limited, highlighting the need for better alignment between risk management and project delivery.
Only 38% of respondents report high engagement between risk and insurance functions and CCS project teams, dropping to 30% among heads of engineering and 29% among industrial emitters.
The analysis also warns that the UK and Europe could miss out on significant CCS investment opportunities if governments fail to provide stable and credible support, as emerging markets in the Middle East and Asia quickly gain traction for capital investment.
Challenges such as rising costs, regulatory readiness gaps, and policy uncertainty could slow deployment, putting jobs and regional economic growth at risk.
According to the findings, Europe remains the leading region for planned CCS investment, with 62% of industry leaders targeting the area, ahead of North America and the Middle East & North Africa.
However, with the average forecast cost to capture, transport, and store CO2 estimated at $163 per tonne—well above current carbon prices—many projects are likely to remain reliant on national subsidies to be commercially viable. Furthermore, 42% of leaders expect costs to rise by 11–15%, while 31% anticipate increases of 16–20%, adding further pressure to project economics.
The cautious approach to CCS investment is reflected in a staggered timeline for Final Investment Decisions (FIDs): 26% are expected between 2025–27, 35% between 2028–30, 23% between 2031–33, and 12% between 2034–36. While this reduces developers’ immediate financial exposure, it risks creating a bottleneck later in the decade, straining financing, supply chains, and storage capacity.
Herring added, “Stable policy frameworks, regulatory certainty, and credible risk transfer mechanisms are essential if the global CCS industry is to attract the scale of investment needed to accelerate decarbonisation and support economic growth. For this vision to be realised, governments must commit to multi-year funding programmes, establish clear project pipelines, and invest in essential CO2 transport and storage infrastructure. The insurance industry is playing its part in enabling this vital energy transition industry to grow – governments must also now step up.”
The findings indicate that CCS investment is shifting from primarily US and Eurocentric markets to a multi-regional frontier.
Emerging regions are positioning themselves as the next growth wave: Australia is leading in the Pacific, with projects linked to LNG and hydrogen exports using existing energy infrastructure, while in China, CCS pilots are projected to expand under the 2060 net-zero pledge.
