CFC expands carbon projects proposition with second product

Specialist insurance provider CFC has launched its second policy for buyers of voluntary carbon credits. 

The new Carbon Cancellation product has been designed to safeguard purchased carbon credits from financial and management risks in the event of cancellation or invalidation.

Buyers are also protected from revocation of article 6 transfer eligibility, as well as loss of eligibility under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

“While more and more businesses invest in the voluntary carbon market as part of their efforts to offset their carbon footprints, their stakeholders are looking for financial certainty on these investments,” said George Beattie, head of innovation at CFC.

“Our new Carbon Cancellation insurance delivers that certainty and represents a further step forward by the insurance industry to facilitate risk transfer in order to help galvanise quality growth in the voluntary carbon market.”

Other product

Carbon credits are produced by any activity that lowers or removes emissions.

This can be through nature-based solutions, like reforestation, and the protection of natural high-carbon-stock assets.

The launch of the new product comes after CFC launched Carbon Delivery insurance , which covers both the physical and political risks faced by businesses purchasing voluntary carbon credits on a forward basis.

“Together with our ground-breaking Carbon Delivery insurance product launched in March this year, CFC is the first insurer to offer both a delivery and cancellation insurance product to buyers of voluntary carbon credits,” said Beattie.

“This means we are supporting both forward financing of prestigious carbon projects and the risks associated with issued credits purchased and retired by companies in pursuit of net zero.”