Insurer Zurich and broker Aon have teamed up to offer a clean hydrogen insurance facility, which they say will make it easier for firms to develop zero-carbon fuel. The service will underwrite projects with capital expenditure of up to US$250 million, and will cover both ‘blue’ and ‘green’ forms of the fuel. Hydrogen is seen as a promising alternative to fossil hydrocarbons, because it is energy-rich, combustible, and emits no carbon dioxide. So-called ‘green’ hydrogen is made by splitting water molecules using renewable energy. Blue hydrogen, meanwhile, is made by extracting the fuel from natural gas, and capturing and storing the carbon dioxide produced in the process underground. But both methods are new and pose novel risks. Zurich and Aon said they had spent two years talking to developers about the specific needs and challenges of developing blue and green hydrogen projects. The new facility will cover construction, delay in start-up, operational cover, business interruption, marine cargo limits, and third-party liability. It will also cover carbon capture and storage (CCS) technology. “Many developers and their capital providers have found it challenging to de-risk and secure adequate insurance coverage for the various phases of global hydrogen projects,” said Joseph Peiser, Global CEO of Commercial Risk at Aon. “This new solution caters to their unique needs, providing comprehensive coverage addressing the complex risks associated with hydrogen projects across the entire project life cycle.” The two firms said the facility was already oversubscribed by insurers.
