Press Release

Paris, October 5th 2022 – One month before COP27, 20 NGOs including Reclaim Finance call on global insurers not to renew insurance coverage to Ichthys LNG, one of the most carbon-intensive liquefied natural gas (LNG) projects in Australia whose promoters TotalEnergies and Inpex (1) are currently planning its climate-wrecking expansion. Based on rare documents from the Supreme Court of Western Australia (2), Reclaim Finance was able 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. One insurer, Suncorp, committed not to renew coverage. In a new report (3), 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 and its mega infrastructure (4) is among the world’s top 1% biggest oil and gas projects (5). The first construction phase of the project was insured between 2012 and 2017 by several insurers (6) 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 thanks to a dozen new gas wells. This expansion could bring the project’s total emissions to 590 MtCO2, which is close to the whole of Australia’s current annual CO2 emissions.

Experts from the International Energy Agency (IEA) clearly indicated that new gas production projects are not necessary in a 1.5°C pathway. 12 of the insurers involved in the construction phase have since joined the Net Zero Insurance Alliance (NZIA) (7) and/or committed to achieving net-zero emissions in their (re)insurance portfolios by 2050, they must take real action in line with the IEA latest conclusions.

Ariel Le Bourdonnec, Insurance campaigner at Reclaim Finance: “The rules of the game 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 (8).

20 NGOs, including Reclaim Finance, sent a letter (9) to 16 insurers (10) 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 (11):

  • HDI Global and Zurich said they have not been approached for covering the project expansion.
  • AXA mentioned that Ichthys LNG was not a project excluded by its climate policy (12) – meaning AXA could insure its expansion.
  • Suncorp is the only insurer previously involved in Ichthys LNG that stated it will not support the project in its expansion.

Reclaim Finance welcomes Suncorp’s decision and calls on all insurers not to support the Ichthys LNG’s expansion reminding that the Race to Zero Initiative has strengthened the criteria that must be followed by all Glasgow Financial Alliance for Net Zero members and which explicitly mention the need for “phasing down and out all unabated fossil fuels as part of a global just transition” (13).

Peter Bosshard, Global Coordinator of the Insure Our Future Campaign: “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”.

Read the report

Contacts:

Notes:

  1. Owners of Ichthys LNG: Inpex (66%), TotalEnergies (26%), Tokyo Gas (1.6%), Kansai Electric (1.2%), Osaka Gas (1.2%), JERA (0.7%) and Toho Gas (0.4%). The Taiwanese national oil company CPC is also involved (2.6%).
  2. Supreme Court of Western Australia, JKC AUSTRALIA LNG PTY LTD (ACN 154 383 409) -v- AIG AUSTRALIA LTD (ACN 004 727 753) [2021] WASC 471, 2021.
  3. Read our full report here.
  4. With the longest subsea pipeline in the southern hemisphere and the world’s largest semi-submersible production platform.
  5. According to Rystad Energy UCube, as of 18th May 2022, Ichthys belongs to the top 1% of the biggest oil and gas projects in terms of resources.
  6. These insurers together provided insurance capacity to Inpex, the major owner of the Ichthys LNG project, through a Project Insurance Policy (Onshore Construction Risks – Material Damage), in respect of the design, fabrication, construction, correction, testing and commissioning of the onshore Ichthys LNG plant at Bladin Point located close to the city of Darwin.
  7. The NZIA brings together 29 (re)insurers that committed to reath net-zero emissions within their underwriting portfolios. The NZIA is part of the broader Glasgow Finance Allianz for Net Zero (GFANZ) which aims at accelerating the decarbonization of the economy.
  8. Allianz, AXA, SCOR, Swiss Re and Zurich. The Oil and Gas Policy Tracker, a tool developed by the NGO Reclaim Finance, assesses their oil and gas policies.
  9. Read the letter here.
  10. AIG, Suncorp, Allianz, AXA, Beazley, Canopius, Chubb, Great Lakes Insurance (Munich Re), HDI Global, SCOR, Sompo, Swiss Re, Talbot, Tokio Marine, Zurich.
  11. The group of insurers that refused to comment on Ichthys LNG: AIG, Allianz, Chubb, Munich Re, SCOR, Sompo, Swiss Re, Tokio Marine and the Lloyd’s of London syndicates.
  12. AXA’s oil and gas policy only exclude new oil fields with exception for projects handled by companies with the most far-reaching and credible transition plans.
  13. Reclaim Finance, Strengthened Race to Zero criteria require GFANZ to support fossil fuels phase-out, 2022.