Shell Says Carbon Capture Projects Face Large Risk Premiums

Projects to capture carbon emissions from power plants and store them permanently underground face “large risk premiums” from insurers because the technology is so new, Royal Dutch Shell Plc said.

“Insurance will be able to address only part of the financial risk exposure,” the company said in a document posted Thursday on the website of the U.K. Department of Energy and Climate Change. It cited a range of reasons that “make it difficult for insurers to price the risk, and may thus cause reluctance to underwrite the risk or result in large risk premiums.”