Swiss Re launches $10mn carbon capture and storage scheme with Climeworks
Swiss Re has signed a $10mn deal with specialist technology firm Climeworks for direct air capture and storage of carbon dioxide over 10 years, as part of the carrier’s commitment to reach net-zero emissions in its operations by 2030.
Swiss Re said the length of term and total value of its purchase agreement were so far unmatched in the voluntary market for carbon removal, and that it sent an “important demand signal” to developers, investors and other buyers.
The companies also agreed to collaborate on developing risk management knowledge and risk transfer solutions, as well as to explore future investment and project finance opportunities.
Christian Mumenthaler, Swiss Re’s group CEO and co-chair of the World Economic Forum's alliance of CEO climate leaders, said the world needed to scale up carbon removal as well as reducing emissions.
“By partnering with Climeworks we can play to our strengths in this endeavour, as a risk taker, investor, and forward-looking buyer of climate solutions,” he explained.
A specialist in carbon dioxide air capture technology, Climeworks is aiming to restore a “healthy” balance of CO2 with its 14 direct capture facilities.
In September it will be launching a new plant in Iceland called Orca which it said would capture 4,000 tonnes of CO2 per year, making it the world’s largest climate positive facility to date.
Swiss Re will now financially support the technology firm’s facilities which filter CO2 from ambient air using geothermal energy before sending it for permanent storage in nearby rock layers.
It is dissolved in water and pumped deep underground, where it reacts naturally with the surrounding basalt rock to form stable carbonate minerals.
“This is considered the safest, most durable form of all carbon removal solutions that are commercially available today,” Swiss Re said.
The carrier added that the service was one of the costliest options, as it came to several hundreds of dollars for every tonne of CO2 removed.
“Larger, more economical air-capture and storage facilities can only be realised if customers are committed to long-term purchasing agreements,” it explained.
The news comes after the firm announced in April that global gross domestic product would contract 18% by 2050 if no action was taken to mitigate global warming, according to its new Climate Economics Index.
In March it said it would stop underwriting thermal coal projects by 2040, as part of its target to achieve net-zero greenhouse gas emissions by 2050 across underwriting, investments and its own operations.