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Climate group says coal projects outside China have become 'uninsurable' | Coal

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According to one report, new coal plant projects are becoming “literally uninsured” outside of China as many insurance companies refuse to support them.

Recent commitments by leading US insurers AIG and Travelers to cease coal commitments According to the latest sector scorecard of the Insure Our Future climate campaign, we increased the number of coal insurance exit policies to 41.

The scorecard ranks the top global fossil fuel insurers by the quality of their fossil fuel exclusion policies. It shows that 62% of the reinsurance market and 39% of the primary insurance market are currently excluding coal, with Allianz, Axa and Axis Capital ranking high for the soundness and breadth of their policies.

Most of the remaining insurers without the coal exception are not active in the fossil fuel sector.

Insure Our Future says many significant delays that continue to undermine new coal projects are unable to mobilize the expertise and capacity needed to insure large, complex new coal plants.

There has also been a significant shift away from oil and gas. During climate talks in Glasgow last year, only three companies had any restrictions on insuring conventional oil and gas projects. But last year, 10 more insurers followed suit.

The latest to do so is Munich Re, the world’s largest reinsurer, which published an ambitious oil and gas exit policy earlier this month. This means that over a third of the reinsurance market is now covered by oil and gas exclusions.

Peter Bosshard, who coordinates the International Campaign to Insure Our Future, attributes change largely to climate campaigns. “So far, there has been no real regulatory pressure. And there was no market pressure… as in the short term, it’s still a profitable business. So we think that public pressure really makes a big difference.”

He adds that insurance companies also feel the warmth of their employees. “Insurance companies have been warning of climate risks for decades and making climate action part of their public brand. Therefore, I think that the pressure from the outside also triggers the pressure from the inside.”

The scorecard identifies Lloyd’s of London in the United Kingdom, the world’s largest energy insurance market, as a key reactionary. He notes that the organization is one of the few remaining European insurers without an oil and gas exception, and is critical of the 2020 coal exit policy, making it a non-mandatory guide for its members.

While it can be difficult to find out which insurance companies are insured, climate campaigners have managed to draw attention to the role of the industry, particularly in high-profile projects.

A total of 18 companies, including Australia’s two largest insurers, QBE and Suncorp, and Italy’s largest insurer, Generali, have refused to support the east African crude oil pipeline (EACOP).

Isobel Tarr of the UK-based Coal Action Network said the escalating rejection of EACOP is a sign that the tide is turning fossil fuel projects. “More and more insurance companies are weighing the risks and may find that a mega-pipeline threatening Lake Victoria, Africa’s largest freshwater reserve, and contributing significantly to the climate crisis, is not worth the risk.”

However, he noted that all companies that fall short of insurance coverage for EACOP have unions at Lloyd’s of London “as the companies behind EACOP are reportedly seeking insurance coverage”.

He said Lloyd’s weak exclusions meant that controversial coking coal mines, such as the Whitehaven mine in Cumbria, could still be insured, and urged the organization to exclude all new fossil fuel projects.

Despite the overall increase in exclusion policies, campaigners say voluntary action is not enough and are calling for more regulation. Insure Our Future noted that the EU banned the insuring of shipping of Russian crude oil in June as part of its sanctions regime against Russia, demonstrating that “regulators can act quickly and effectively in crisis situations”.

In June, the UN-backed Race to Zero campaign made it clear for the first time that members of net-zero alliances must “phase out and phase out all unreduced fossil fuels.” But Renaud Guidée, head of risk at Axa and chairman of the Net Zero Insurance Alliance, resisted the call to demand that members stay out of insurance coverage.

A Lloyd’s spokesperson said the organization is “committed to securing the transition to net zero by delivering vital risk management solutions that enable multi-sectoral decarbonisation, large-scale clean energy investment and expansion, and by deploying increased capital to support.” climate innovation”.

Lloyd’s did not disclose how many of its unions have decided not to guarantee new coal projects, but said it has asked all management units to develop its own environmental, social and governance goals and policies for inclusion in insurance strategies: According to each individual who manages to decide on their own climate goals and policy, the company The company believes that stopping providing new protection for these classes and phasing out existing coverage by 2030 remains a logical and pragmatic goal to support the energy transition. ”