Category: Energy insurance · Reviewed by Matt Bartlett, Director · Founder · Last reviewed 2026-06-05
Hydrogen project insurance is the emerging sub-class of renewable energy insurance covering the production, storage and transport of hydrogen, including green hydrogen (electrolysis powered by renewable electricity), blue hydrogen (steam methane reforming combined with carbon capture and storage) and the associated hydrogen storage and distribution infrastructure.
Category: Energy insurance Also known as: hydrogen insurance, green hydrogen insurance, blue hydrogen insurance First codified: market wordings under development from c.2020; first dedicated facility cover c.2023 Related legislation: Energy Act 2023 [1]; Climate Change Act 2008 [2]; Control of Major Accident Hazards Regulations 2015 [3]
Hydrogen project insurance is a new and rapidly developing area within the energy insurance class, responding to the growth of hydrogen as a vector for decarbonising hard-to-abate sectors (heavy industry, heavy transport, certain heating applications). The class is in formative stage, with wordings still under development and capacity still building. The principal sub-classes are [4][5]:
Green hydrogen: hydrogen produced by water electrolysis using renewable electricity. The principal assets are the electrolyser stack (alkaline, PEM or solid oxide), the gas processing equipment (compression, drying, purification), the storage facility (typically high-pressure tanks or, for larger projects, underground caverns), and the supporting balance of plant.
Blue hydrogen: hydrogen produced by steam methane reforming or auto-thermal reforming, with the carbon dioxide captured and sequestered through carbon capture, utilisation and storage (CCUS). The principal assets are the reforming unit, the carbon capture facility, the CO2 transport infrastructure (typically pipeline) and the geological storage site (typically depleted oil and gas fields or saline aquifers).
Hydrogen storage and transport: high-pressure gaseous storage, liquefied hydrogen storage (at cryogenic temperatures), pipeline infrastructure, road and rail tankers and (emerging) shipping infrastructure for liquid hydrogen and ammonia as a hydrogen carrier.
Hydrogen end-use: at large industrial customers (steel mills, refineries, ammonia plants) and at hydrogen refuelling stations for heavy vehicles. Insurance is typically integrated with the customer’s existing property and liability programme rather than separately placed [4][5].
The Energy Act 2023 establishes the UK regulatory framework for low-carbon hydrogen, including the Hydrogen Production Business Model (HPBM) — the principal subsidy mechanism for low-carbon hydrogen — and the Hydrogen Levy. The Act also provides for licensing of hydrogen transport and storage and creates new powers for regulators in respect of the hydrogen economy [1][6].
The Climate Change Act 2008 provides the underlying climate policy framework, with low-carbon hydrogen as one element of the UK’s pathway to net zero by 2050. The UK Hydrogen Strategy (2021) and subsequent policy documents set out the government’s ambition to develop up to 10 GW of low-carbon hydrogen production capacity by 2030 [2][7].
Major hydrogen facilities are likely to be classified as upper-tier COMAH sites under the Control of Major Accident Hazards Regulations 2015 implementing the Seveso III Directive. The HSE and the Environment Agency are joint Competent Authorities for COMAH, requiring extensive safety case and emergency planning documentation. Hydrogen presents specific safety challenges (low ignition energy, high diffusivity, hydrogen embrittlement of steels) that require dedicated underwriting attention [3][8].
For blue hydrogen projects with CCUS, the licensing regime for CO2 storage is set by the Energy Act 2008 (Part 1, Chapter 3) and the Storage of Carbon Dioxide (Licensing etc.) Regulations 2010, administered by the North Sea Transition Authority and the Crown Estate. CO2 storage liability arises both during the operational phase and after closure of the storage site, with bespoke liability arrangements still under development [9][10].
Construction insurance for major hydrogen projects is typically arranged as a project-specific CAR programme, often with significant DSU cover reflecting the long-term offtake agreements that may underpin project financing. Total insured values for major green hydrogen projects (with electrolyser capacity in the tens to hundreds of MW) are typically £200m–£800m or more, and for major blue hydrogen projects with integrated CCUS substantially more. The programmes are placed in the London, Bermuda and continental European markets, drawing on capacity from the energy CAR sector with material involvement from the petrochemical CAR sector reflecting the process-plant nature of the assets [4][5].
Operational insurance for hydrogen projects is at a formative stage. Wordings are still being developed and there is limited claims experience to inform underwriting. Most major projects are in pre-construction or construction phase; the first significant operational portfolios are coming on stream in the late 2020s. Initial cover scopes draw on related sectors (refinery and petrochemical property for blue hydrogen; battery storage and renewable generation for green hydrogen) with hydrogen-specific modifications [4][5].
Underwriters assess hydrogen project risk based on technology selection (electrolyser type and OEM for green; reformer technology and CCUS scheme for blue), process safety management, fire and explosion risk assessment, hydrogen embrittlement and materials selection, and the operator’s experience and competence. The market is highly engaged in supporting the early projects but also cautious about taking large concentrated exposure in a sector with limited operating experience [4][5].
Green hydrogen production: electrolyser-based projects, often co-located with renewable generation (solar, wind) or connected to the grid with renewable PPAs. The dominant technology pathway for new projects.
Blue hydrogen production: steam methane reforming with CCUS, typically integrated with existing natural gas infrastructure and industrial clusters (the East Coast Cluster, HyNet North West).
Hydrogen storage: above-ground compressed gaseous storage for small to medium volumes; underground salt cavern storage for large-scale long-duration storage; ammonia synthesis and storage as a hydrogen carrier for export markets.
Hydrogen transport: pipeline conversion of existing natural gas infrastructure; dedicated hydrogen pipelines; road and rail tanker transport; emerging shipping of liquid hydrogen and ammonia.
Hydrogen end-use insurance: integrated with customer operations (steel decarbonisation, refinery hydrogen, ammonia production, heavy vehicle refuelling) rather than separately placed.
Carbon capture and storage liability: a related but distinct cover for the long-term liability of CO2 stored geologically. Particularly relevant for blue hydrogen projects with integrated CCUS.
A consortium of UK industrial companies develops a 100 MW green hydrogen production facility co-located with an offshore wind farm grid connection, producing hydrogen for offtake by industrial customers in an adjacent industrial cluster. Total project value is approximately £450m comprising the electrolyser stack and ancillary equipment (£200m), hydrogen processing and storage infrastructure (£150m) and balance of plant (£100m). Construction insurance is arranged as a project-specific CAR programme with limits of £400m and a 24-month DSU extension covering the lost first-year offtake revenue. The CAR programme is placed in London with following markets in continental Europe and Bermuda. Annual CAR premium is approximately £4.5m. Operational cover post-commissioning is expected to be approximately £80m per occurrence with £30m BI. Figures in this example are illustrative.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-05. Next review: 2026-12-05.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
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