Swiss Re, one of the world's largest reinsurers, signed the first long-term contract in August under which a company purchases carbon capture from the atmosphere. Under the agreement, Swiss Re will provide US$10 million over the next ten years to Climeworks (https://climeworks.com/), a startup that is launching the largest CO2 capture plant ever built this month in Iceland. The plant, called Orca, will capture 4,000 metric tons of CO2 per year using geothermal energy. This CO2 will be mixed with water and injected underground, where it will solidify.

The development of cost-effective technologies for capturing CO2 from the atmosphere is still in its early stages. In announcing the agreement, Swiss Re noted that it aims to send a signal to project developers, as well as to investors and other potential buyers of CO2 capture technology.

The insurance sector is highly exposed, from a financial standpoint, to the effects of global warming and climate change. According to Swiss Re’s mid-year report, insurance-related losses totaled US$40,000 million in the first half of the year, the second-highest figure ever recorded for a half-year period, due in part to climate change-related events.

Climeworks launched its first carbon capture plant in Switzerland in 2017, where the captured CO2 is sold for use in the production of fertilizers, soft drinks, and synthetic fuels.