In what’s likely the first of many deals to come, one of the world’s largest insurance companies is paying a company to directly take carbon dioxide out of the atmosphere.
Image Credit: Climeworks
The $10 million agreement between the reinsurance company Swiss Re and Climeworks, an early stage company that’s developed a technology to remove carbon dioxide from air, covers a 10 year period and an unspecified amount of carbon dioxide.
For Swiss Re, the deal will help the company reach its goal of becoming carbon neutral by 2030, but it also provides a model for other insurance companies to follow suit.
Insurers like Swiss Re aren’t just acting for the benefit of the planet — their own bottom lines are at stake.
Earlier this month, the company released a report indicating that it had already spent more than $42 billion in payouts for climate related disasters.
“The effects of climate change are manifesting in warmer temperatures, rising sea levels, more erratic rainfall patterns and greater weather extremes,” said Swiss Re’s Martin Bertogg, the Head of Cat Perils. “Taken together with rapid urban development and accumulation of wealth in disaster-prone areas, secondary perils, such as winter storms, hail, floods or wildfires, lead to ever higher catastrophe losses.”
A livable world (one that’s less subject to natural disasters) will require the removal of up to 1 trillion tons of CO2, according to the United Nations Intergovernmental Panel on Climate Change report. That means companies need to get cracking sooner rather than later.
As Swiss Re’s Mischa Repmann told Bloomberg News, about his company’s foray into paying for carbon capture, “It’s a call for action, and we’re hoping that others will follow.”
ClimeWorks is just one of a number of businesses that are working on innovative technologies to take carbon dioxide out of the air. There’s also the Canada-based business, Carbon Engineering, which has its own contracts to grab airborne CO2.
Some very early stage companies like Noya Laboratories and Holy Grail, which are backed by venture capital investors who take big bets on risky technology (like FootPrint Coalition), are working on modular systems that can be deployed on top of industrial facilities or even at homes.
Of course, taking the CO2 out of the air is only the first step in a process. Climeworks is working on a project in Iceland that, as Bloomberg reported, would use geothermal energy to filter CO2. Once it’s captured, the CO2 is dissolved in water and pumped into rock layers where it can be stored permanently.
In Oman, one of the massive oil-producing nations on the Arabian peninsula, Climeworks is working with another early stage company called 44.01 to store CO2 in peridotite mineral deposits.
Peridotite reacts with CO2 and water to produce the mineral calcite, which is inert, harmless, and can remain in geological formation for centuries. The mineral is typically found below sea level, but thanks to shifting tectonic plates (and in an irony of history), the mineral deposit that could store hundreds of millions of tons of CO2 produced from the region’s oil and gas exploration and use, is on the surface.
To finance its operations, 44.01 raised $5 million in funding from investors including Breakthrough Energy Ventures and the Apollo Project.
Neither Swiss Re nor Climeworks would tell Bloomberg how much they’re spending on CO2 removal, but Bill Gates cut a deal with another Climeworks partner, Carbfix, for $600 per ton to store CO2.
Climeworks told Bloomberg that it would look to reduce that figure to $200 per ton by 2030.
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