CFC has announced it is among the first private insurers approved to offer policies supporting the eligibility of carbon credits under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
CORSIA, established by the International Civil Aviation Organization (ICAO), is a global initiative aimed at limiting carbon emissions from international flights. In its initial phase, airlines from participating countries must offset a portion of their emissions between 2024 and 2026. The scheme will become mandatory for most ICAO member states beginning in 2027.
CFC’s CORSIA Guarantee Insurance (CGI) has received approval from Gold Standard as an insurance solution for the first phase of the CORSIA scheme. Insurance is one of two options available to project developers to ensure their credits qualify under CORSIA requirements.
The policy covers the risk that corresponding adjustments are not applied. A corresponding adjustment is an accounting mechanism under Article 6 of the Paris Agreement, ensuring that emission reductions from carbon credits transferred internationally are only counted once. Failure in this process is considered a form of sovereign political risk.
“Project developers have faced huge challenges in obtaining their compulsory CORSIA insurance coverage. There have been no commercially viable options available to-date, despite the great efforts of the World Bank,” said George Beattie (pictured above), head of innovation at CFC. He said that CFC is expanding its role in carbon insurance by providing compulsory insurance to projects supplying credits to the CORSIA scheme.
Over the past 18 months, CFC has launched several products in the carbon insurance market and has facilitated large transactions, including enabling a $200 million debt facility provided by JP Morgan to Chestnut Carbon, a US-based project developer.
Beattie said the insurance industry can play a role not only in financing carbon credit projects but also in supporting the implementation of industry-wide carbon reduction schemes. He described the initiative as a potential model for similar programs in other sectors as climate-related challenges persist.
CFC’s recent developments extend beyond product launches. The company is currently undergoing significant international expansion, establishing new offices in the US, Canada, Australia, and continental Europe.
This growth is supported by a $1.7 billion debt refinancing, which CFC says is aimed at reducing its cost of capital and supporting further expansion. The company now operates in 90 countries, with nearly half its business originating in the US.
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