Broker Marsh launches the world’s first insurance for hydrogen projects | Business Insurance

know about this Broker Marsh launches the world’s first insurance for hydrogen projects

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  • Developed with AIG, Liberty Specialty Markets
  • Coverage of up to $300 million for construction, start-up phases
  • It comes as the world looks to expand the infant industry

LONDON, Aug 22 (Reuters) – Broker Marsh, a unit of Marsh & McLennan (MMC.N), said on Monday it was launching the world’s first dedicated insurance for hydrogen power projects as the nascent industry looks to scale rapidly in the fight against climate change.

As the world targets net-zero emissions by mid-century in an effort to limit global warming, hydrogen, particularly “green” hydrogen made from renewable energy sources, is seen as a crucial means of getting there.

Earlier this month, US politicians endorsed a $430 million spending package that included support for a variety of renewable energy sources such as hydrogen. read more

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Highly flammable gas-related projects have often had a harder time finding coverage, in part because of the complexity and risks involved in production, transportation and storage, and because new and emerging technologies are generally considered riskier. .

Developed with insurers American International Group (AIG.N) and Liberty Specialty Markets, Marsh said the new facility would provide up to $300 million of risk coverage for the construction and commissioning phases of hydrogen projects globally.

The facility would be available to multinational organizations as well as smaller companies, and would cover new and existing “blue” and “green” hydrogen projects, the world’s largest insurance broker said.

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Blue hydrogen is produced from natural gas, while green hydrogen is produced from renewable sources and is considered to provide a low-emission and flexible fuel for transportation, electricity generation and as an input in various industrial processes. .

“The Marsh facility is an important development for the insurance industry that will help accelerate the global energy transition to renewables,” said Andrew George, global director of Power and Energy for Marsh Specialty.

“As the global hydrogen industry, especially green hydrogen, grows rapidly to meet demand, the facility will reduce the complexity of securing risk transfer options for operators of all sizes and increase investor and lender confidence.” to achieve the ambitious deadlines of their projects.

Marsh clients could opt for coverage for the initial phase or choose a combined risks policy that extends to the first year of operations, the New York-based company said.

Renewable, low-carbon hydrogen would account for just 5% of the world’s final energy mix by 2050, short of what is needed to meet climate goals, according to a June report by Norway-based global energy consultancy DNV. . read more

To meet the Paris Agreement to limit global warming to 1.5 degrees by 2050, hydrogen would have to reach 13%.

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Edited by David Evans

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