Broker Marsh, a unit of Marsh & McLennan, said on Monday it was launching the world’s first dedicated insurance for hydrogen energy projects, as the nascent industry looks to scale up quickly in the fight against climate change.
As the world targets net-zero emissions by mid-century in an effort to cap global warming, hydrogen, particularly “green” hydrogen made from renewable energy sources, is seen as a crucial means of getting there.
U.S. politicians earlier this month backed a $430 million spending package that included support for a range of renewable energy sources such as hydrogen.
Projects involving the highly flammable gas have often found it harder to find cover, partly because of the complexity and risks involved in production, transportation and storage, and as new and emerging technologies are generally considered riskier.
Developed with insurers American International Group and Liberty Specialty Markets, Marsh said the new facility would provide up to $300 million of cover per risk for the construction and start up phases of hydrogen projects globally.
The facility would be available to multinational organizations as well as smaller firms and cover both new and existing “blue” and “green” hydrogen projects, the world’s largest insurance broker said.
Blue hydrogen is produced from natural gas, while green hydrogen is made from renewable sources and is seen providing a flexible and low-emission fuel for transportation, electricity generation, and as an input into various industrial processes.
“Marsh’s facility is an important development for the insurance industry that will help enable the acceleration of the global energy transition to renewables,” said Andrew George, global head, Energy & Power, Marsh Specialty.
“As the global hydrogen industry, especially green hydrogen, scales up rapidly to meet demand the facility will reduce the complexity of securing risk transfer options for operators of all sizes and boosts investor and lender confidence in achieving their ambitious project timeframes.”
Marsh’s clients could either opt for coverage for the startup phase or choose a combined risks policy that extends to first-year operations, the New York-based company said.
Renewable and low-carbon hydrogen would account for only 5% of the global final energy mix by 2050, falling short of what is needed to meet climate goals, according to a report in June from Norway-based global energy consultancy DNV.
To meet the Paris Agreement to limit global warming to 1.5 degrees by 2050, hydrogen would need to reach 13%.
(Editing by David Evans)
The most important insurance news,in your inbox every business day.
Get the insurance industry’s trusted newsletter
Wise (formerly TransferWise) is the cheaper, easier way to send money abroad. It helps people move money quickly and easily between bank accounts in different countries. Convert 60+ currencies with ridiculously low fees - on average 7x cheaper than a bank. No hidden fees, no markup on the exchange rate, ever.
How to access the offer?
1- Click here
2- Select “Register''
3- Enter your email address, create a password, and select your country of residence
4- Fill out the required personal information, and the free first transfer offer will be applied automatically.
Benefits of the Multi-Currency Account:
- Free to create online
- Hold 50+ currencies
- Get multiple local bank details in one account (including EU, UK, US)
- Convert currency at the real exchange rate, even on weekends
- Spend whilst travelling on the Wise debit card without high conversion fees
Wise International Transfers:
- $1.5 billion saved by customers every year
- Send money to over 60 target currencies
- Lower fees for larger transfers
- No hidden fees. No bad exchange rates. No surprises.
- Send your money with a bank transfer, or a debit or credit card