Carbon Credits Have a Risk Problem. TerrAssure Is Now Helping Insure It.

A new line, built on familiar ground

TerrAssure Underwriting Solutions is now offering carbon credit insurance in Canada.

Our work has always been environmental risk: contaminated land, pollution events, and the physical things that go wrong on a site. Carbon projects carry many of the same exposures. A forest can burn. A soil carbon project can underperform after several dry years. A removal facility can be delayed and deliver fewer credits than an offtake contract promised. Credits can be reversed or invalidated after they have already been purchased.

None of that is new to an environmental underwriter. What is new is that the asset at risk is a carbon credit rather than a parcel of land.

What we can arrange cover for

• Forward purchases where fewer credits are delivered than contracted
• Issued or retired credits cancelled following a reversal or invalidation
• Developers using insurance instead of contributing credits to a registry buffer pool
• Lenders financing projects that rely on future carbon revenues
• Credits intended for the CORSIA aviation market

Limits up to USD $40 million per project, and terms up to seven years.

What it does for each party

For buyers, it protects the financial value behind a carbon purchase and the claim attached to a net-zero commitment. A cancelled credit is a cost and a compliance problem at the same time.

For developers, it offers an alternative to tying up credits in a registry buffer pool. Credits sitting in a buffer are credits not being sold.

For lenders, it adds protection around projects whose economics depend on future credit sales, which is most of them.

The projects we want to see

We are particularly interested in:

• Forestry and improved forest management
• Agricultural soil and grassland carbon
• Landfill gas and methane capture
• Carbon removal, including biochar, mineralization, and direct air capture

Talk to us

If you have a client buying, selling, developing, or lending against carbon credits, we would like to hear about it. Environmental risk does not stop being environmental risk because the asset happens to be a carbon credit.

Reach us at info@terrassure.ca. For background on how these credits actually fail, and why registry buffer pools were never built to absorb catastrophe, read When a Carbon Credit Fails.