Insurance broker Marsh today set out plans to launch the world’s first ever dedicated hydrogen insurance offering, to provide coverage for new and existing H2 energy projects.
Marsh’s new fund will provide cover worth up to $300m per project in a bid to capitalise on a fast-growing sector that is set to see $150bn invested in it by 2025.
The initiative will see Marsh provide insurance for both green hydrogen projects – which produce H2 using renewable electricity – and blue hydrogen projects – which manufacture the hydrogen using natural gas.
The fund will offer insurance policies to those building and starting up hydrogen facilities, as governments, industry, and traditional energy majors increasingly begin to plough billions into hydrogen technology, in line with efforts to decarbonise heavily polluting industries before the 2050 net zero deadline.
Hydrogen is set to play a key role in cutting emissions in hard-to-decarbonise sectors, such as heavy-duty transport and steel production, due to the fact it produces only water (H2O) when burned.
Green hydrogen is seen as particularly promising in light of its potential to become an entirely zero-carbon fuel, in allowing electricity produced from wind, solar, and hydro generation to be stored as a gas and burned.
Andrew George, head of energy and power at Marsh, said: “Marsh’s facility is an important development for the insurance industry that will help enable the acceleration of the global energy transition to renewables.”
Marsh’s new hydrogen insurance facility will be backed by a panel of A-rate global insurers, led by Liberty Specialist Markets and AIG.
Lesley Harding, global head of energy at Liberty Specialty Markets, said: “Our ambition is to be the strategic insurance partner for clients engaged in the energy transition.”
AIG’s head of energy and construction, James Langdon, said: “This innovative solution is one of many initiatives that we are working on with our clients and broker partners in support of the energy transition and our net zero commitments.”