Why 2023 Could Be the Year that CCUS Goes Mainstream in the UK and How Insurance Companies Need to Adapt?
As the UK government sets out its ambitious plans to reach net-zero emissions by 2050, CCUS is increasingly being viewed as a critical technology in achieving this goal. While CCUS is still in its early stages in the UK, 2023 could be the year that it really hits the mainstream.
In this blog post, we’ll explore why this is the case and how insurance companies need to adapt.
Why 2023 Could Be the Year that CCUS Goes Mainstream in the UK
In order to establish two carbon capture clusters by the middle of the 2020s, the UK government is looking at a increase in funding of CCUS projects. Pipelines and storage facilities will be built as a result of this financing, which will also support the growth of CCUS infrastructure. A carbon pricing plan, which will place a price on carbon emissions and encourage businesses to invest in CCUS technologies, is also scheduled to be unveiled by the government in 2023. We can anticipate seeing more businesses engage in CCUS technology as a means of achieving their sustainability objectives as it becomes more widely used and better understood. As a result, there will be more demand for insurance companies to cover CCUS projects.
How Insurance Companies Need to Adapt
As with any emerging technology, CCUS comes with a unique set of risks that need to be managed. Insurance companies will need to work closely with CCUS developers to understand the risks involved and provide tailored coverage to protect against these risks.
For example, insurance companies may need to provide coverage for environmental liabilities, such as leaks from carbon capture storage facilities. They may also need to provide coverage for business interruption, in case a CCUS project is forced to shut down due to unforeseen circumstances.
2023 could be the year that CCUS really takes off in the UK. As more companies invest in carbon capture, utilization and storage technology, insurance companies will need to adapt to provide tailored coverage that meets the unique risks associated with this emerging technology. By doing so, they can play a vital role in supporting the growth of CCUS and helping the UK to reach its net-zero emissions target.
We at Sustain Insurance Brokers recognise the importance that the success of CCUS has on the future of our planet and have therefore developed a detailed understanding of the sector to be able to advise clients to mitigate their risks by using properly structured insurance programs.
