The Club encourages oil and gas clients with its new Environmental Care & Emission Reduction underwriting assessment
Norwegian Hull Club is further reinforcing its commitment to the energy transition by introducing Environmental Care & Emission Reduction (ECER), a new area of assessment in its underwriting procedures.
In line with its Mission ‘to secure lives, health, environment and property to help protect both people and the planet’, ECER will see environmental standards, emission reduction and energy efficiency all forming part of The Club’s underwriting guidelines and rating model for Oil & Gas clients from 2023.
ECER will involve an assessment by The Club of measures taken by the Assured – and indeed the prospective Assured - to reduce emissions and increase energy efficiency. To best enable such an evaluation, a partnership with Esgian – Greenpact Rigs - leading data suppliers to the offshore rig industry - has been established.
The Club will offer an ECER allowance based on estimated CO2e and NOx reductions due to installed emission reducing and energy efficiency systems. The use of Selective Catalytic Reduction Systems (SCRs) and Closed Bus Tie Systems, for example, may qualify a rig for an ECER rate reduction. Similarly, through its ECER assessment and allowance, Norwegian Hull Club will also encourage clients to install enclosed flare systems and waste-heat recovery solutions on their platforms.
‘An important role’
To mitigate climate change, we must reduce or prevent the emissions born of human activities. As mitigatory measures, reduction and prevention of fossil fuel emissions are vital. At the same time, the world finds itself in an energy crisis with high demand, record prices and surging activity. The Club believes the Oil & Gas industry will continue to play an important role in delivering energy to the world in the future. That said, the industry needs to cut emissions from production, while also developing renewable energy installations by utilising its capital, competence and experience.
Norwegian Hull Club therefore remains committed to developing services and products for its valued Oil & Gas clients and members involved in developing, establishing, operating and servicing the offshore energy industry of both today and tomorrow. This is performed in line with The Club’s belief in reducing negative impact on people and the environment, through sharing knowledge and accumulating experience, providing hands-on contingency response and claims-handling support, as well as developing solutions that best assist the transition to new, greener operations.
Norwegian Hull Club will continue to follow its forward-leaning Oil & Gas clients as they move into new segments such as wind farms, solar and tidal energy. Indeed, The Club has insured Offshore Windfarms since early 2018, focusing in particular on servicing the floating segment as a leading insurer and claims leader. Also, for floating tidal installations and carbon capture projects, The Club has provided innovative insurance solutions to the world's largest tidal energy plant, the MeyGen project, as well as Orbital Marine Power’s O2, the most powerful tidal turbine in the world.
‘Incentives can encourage change’
Hans Christian Seim, CEO of Norwegian Hull Club, said: “Incentives can encourage change and introducing the Environmental Care & Emission Reduction assessment and allowance is an important, committing, and concrete step in The Club’s contribution to encourage progress towards zero emissions by 2050.
"It is Norwegian Hull Club’s belief that the overall insurance premium in the offshore Oil & Gas market is insufficient to cover the volatility in the industry; it is certainly not the case that we intend to reduce this further for the segment. However, as a global marine and offshore energy insurance provider with a forward-leaning sustainability focus, we remain committed to developing innovative services and products for our valued Oil & Gas clients.
"We expect the industry to continue its efforts towards reduction and hope our unique underwriting focus, through bold initiatives such as Environmental Care & Emission Reduction, provides enabling incentives on this crucial journey.”