Reinsurer Swiss Re has signed a ten-year purchase agreement with Climeworks, a specialist in carbon dioxide air capture technology, to tackle climate change using direct air capture and storage of carbon dioxide.
Worth $10 million over the ten years, Swiss Re hopes the collaboration will help it to achieve its goal of reaching net-zero emissions in its own operations by 2030.
The companies also agreed to collaborate on developing risk management knowledge and risk transfer solutions, as well as to explore future investment and project finance opportunities.
”To mitigate the risks of climate change, the world needs to scale-up carbon removal on top of, not instead of emission reductions. By partnering with Climeworks we can play to our strengths in this endeavour, as a risk taker, investor, and forward-looking buyer of climate solutions”, said Christian Mumenthaler, Swiss Re’s CEO and Co-Chair of the World Economic Forum’s Alliance of CEO Climate Leaders.
The technological carbon removal solution offered by Climeworks in Iceland filters carbon dioxide (CO2) from ambient air using geothermal energy, with captured CO2 then sent for permanent storage in nearby rock layers.
It is dissolved in water and pumped deep underground, where it reacts naturally with the surrounding basalt rock to form stable carbonate minerals, and is considered to be among the safest forms of carbon removal that are commercially available.
Christoph Gebald, co-CEO and co-founder of Climeworks, commented: ”We are very proud to have established the basis for a unique long-term partnership with the leading risk knowledge company Swiss Re. This is a decisive milestone for the scale-up of Climeworks and the direct air capture industry.”
Swiss Re notes that the re/insurance sector is uniquely positioned to offer support for climate solutions on multiple fronts, via demand signals, de-risking and financing.
And in past reports, the reinsurer has warned that meeting the Paris climate targets will not be possible without a huge carbon removal industry.
In order to reach net zero by 2050 and stay negative throughout the second half of the century, it’s thought that global emission levels will need to be cut in half by 2030.
But Swiss Re claims that this will require up to 10 to 20 billion tonnes of negative emissions per year in and after 2050, meaning an increase in carbon removal capacity by 60% every year over the next three decades, an unprecedented growth rate for a new industry.
Back in January, the company’s CEO, Christian Mumenthaler, expressed confidence that companies in the World Economic Forum’s (WEF) Alliance of CEO Climate Leaders can reach their target of net zero carbon emissions by 2050.