Ping An, one of the largest integrated financial groups in China, has launched its first ocean carbon sink index insurance policy in an initiative that will also help to protect marine ecological systems, the company has announced.
Through its property and casualty insurance (P&C) division, Ping An launched the insurance policy on Tuesday for the Chinese coastal city of Dalian in the country’s north-east, and one which follows a pilot project the company had initiated in 2021 for forest carbon sink remote sensing index insurance.
The ocean carbon sink insurance will provide protection for kelp, shellfish, and algae, with a policy that provides 400,000 yuan ($58,400) worth of coverage in an area size covering 8,867 square metres.
The policy builds on Ping An’s carbon sink insurance coverage for terrestrial and marine ecosystems, which includes forests, mangroves, and grasslands, according to a company statement.
“The ocean carbon sink index insurance in Dalian is Ping An’s first foray into the field of the ocean carbon sink,” the statement said.
“Ping An will provide compensation when specific changes in the marine environment damages local species such as kelp, shellfish, and algae and leads to the weakening of carbon sink,” it added.
The compensation for losses can be used for the rescue of marine species after a disaster, as well as restoration of the marine ecological system and its carbon sink capacity.
The policy will also enhance ocean CO2 sequestration capacity by encouraging the fishing sector to protect and repair marine ecosystems, enabling carbon sink indicators of marine aquaculture to be listed and traded to boost fishing income, and turning the marine carbon sink from a resource into an asset.
Oceans can absorb approximately 2 billion tonnes of CO2 per year year from the atmosphere, which is 50 times the capacity of the atmosphere and 20 times that of terrestrial ecosystems, according to the Ping An statement.
However, due to the ever-changing marine climate, marine disasters such as typhoons, abnormal sea temperatures, and red tides (algae blooms) could compromise the carbon sequestration capacity of the ocean, releasing CO2 back into the atmosphere and hindering progress towards carbon neutrality, it added.
Ping An is committed to ESG principles in its insurance business to create sustainable insurance products, and as of Nov. 2022, Ping An P&C provided over 174 trillion yuan in green insurance coverage to promote green development, according to the company.
“We will continue to develop more agricultural insurance products for ecological and environmental protection, as well as explore different pathways to achieve low carbon transformation for insurance services,” Jiang Hua, director of Ping An P&C, stated.
“We will fully support the development of carbon sink forests and carbon sink fisheries, providing comprehensive risk protection for carbon sink resources to help China achieve its ‘dual carbon’ goals.”
In January last year Ping An donated 1.5 million yuan to a biodiversity project, in partnership with conservation groups, to protect the South China tiger, one of the ten most most critically endangered species in the world, with only 250 in existence, all in captivity.
“The protection of the South China tiger is of great importance and breeding of the species in captivity is a necessity to help conserve the species,” Ping An stated.
By Peter Kiernan – peter@carbon-pulse.com
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