Campaigners urge insurers to turn off the tap to LNG project cover

Climate campaigners have hailed the decision by Australian insurance giant Suncorp not to insure a controversial LNG project.

As the clock clicks down to the COP27 meeting in Egypt, Reclaim Finance calls on global insurers not to renew insurance coverage to Ichthys LNG, a project it describes as one of the most carbon-intensive liquefied natural gas (LNG) in Australia.

The group said today it had accessed documents from the Supreme Court of Western Australia, which enabled Reclaim Finance  to reveal the names of the insurers already involved in the existing project and identified among them 10 members of the Net-Zero Insurance Alliance.

It added Suncorp has committed not to renew coverage. In a new report, the NGOs warn others that moving ahead by covering the project expansion would be “a breach of their climate pledges” and call on them to follow Suncorp’s example.

Located offshore from Australia’s northwest coast, Ichthys LNG is among the world’s top 1% biggest oil and gas projects. The first construction phase of the project was insured between 2012 and 2017 by several insurers such as AAI (Suncorp Group) AIG, Allianz, XL (now AXA Group), Chubb, HDI Global, Helvetia, Munich Re (through its subsidiary Great Lakes Insurance), SCOR, Sompo, Swiss Re, Tokio Marine, Zurich and five Lloyd’s of London syndicates AM Trust, Beazley, Canopius, Navigators Underwriting Agency and Talbot.

The project’s developers Inpex and TotalEnergies are now planning an expansion phase to extract gas at least until 2060 via a dozen new gas wells. Reclaim Finance said the expansion could bring the project’s total emissions to 590 MtCO2, which is close to the whole of Australia’s current annual CO2 emissions.

The NGO added 11 of the insurers involved in the construction phase have since joined the Net Zero Insurance Alliance (NZIA) and/or committed to achieving net-zero emissions in their (re)insurance portfolios by 2050.

Ariel Le Bourdonnec, insurance campaigner at Reclaim Finance explained: “The game rules have changed! Since the beginning of Ichthys LNG’s construction, the Paris Agreement has been adopted. Most insurers involved in the past in this project have since joined the NZIA and thus committed to reach net-zero emissions by 2050 following a 1.5°C pathway for their (re)insurance portfolios. If they want to meet their climate pledges, they cannot renew their support in such a gas expansion project like Ichthys LNG’s expansion or any other new oil and gas production project”

Among the insurers involved in the Ichthys LNG project so far, only five have adopted policies restricting coverage to new conventional oil and gas projects for their (re)insurance portfolios. Yet, none of their exclusion policies tackles LNG projects. A total 20 NGOs, including Reclaim Finance, sent a letter to 16 insurers to warn them about the risks posed by Ichthys LNG and call on them to publicly commit not to support its expansion. Since then, only four of them decided to comment.

In response Reclaim Finance said HDI Global and Zurich said they have not been approached for covering the project expansion. AXA said that Ichthys LNG was not a project excluded by its climate policy.

Suncorp was the only insurer previously involved in Ichthys LNG that stated it will not support the project in its expansion.

Peter Bosshard, (pic) Global Coordinator of the Insure Our Future Campaign added: “Many insurance companies take a lot of credit for their net-zero commitments. The first step of a credible net-zero pathway is to end all insurance for fossil fuel expansion projects. Providing cover for Ichthys LNG or any other new fossil fuel project would be inconsistent with their public commitments. Allianz, AXA, Munich Re, Swiss Re, Tokio Marine, Zurich and other self-proclaimed climate leaders must follow Suncorp’s lead and rule out support for this Australian carbon bomb.”