Press Release: Kita launches Enhanced Rock Weathering insurance product

• Carbon insurance specialist, Kita, has expanded its innovative Carbon Purchase Protection Cover to Enhanced Rock Weathering (ERW) projects. Kita’s insurance will protect buyers and investors of forward-purchased ERW carbon credits. The provision of insurance encourages more early investment into projects by mitigating the risk of project underperformance that could lead to an under-delivery of carbon credits. 

• ERW has been identified as a durable, highly scalable and permanent Carbon Dioxide Removal technique that has the potential to scale-up to billions of tonnes of annual carbon removal. 

• The market size of the global ERW sector was thought to be in the low millions of dollars in 2023 and is expected to scale to over $400m in 2030. The opportunities for participants in this market are significant. 

Kita, the carbon insurance specialist, today announces the expansion of its pioneering carbon insurance to cover carbon credits from Enhanced Rock Weathering (ERW). ERW is a type of carbon dioxide removal that accelerates the natural rock weathering process to capture and store carbon.   

A significant overarching barrier for ERW buyers/investors and project developers is that there are few risk management mechanisms in place in relation to ERW projects (as well as more widely across the voluntary carbon market). This means that if a transaction fails, there is limited recourse. The absence of risk management can act as a deterrent for parties seeking to invest or secure substantial financial capital, potentially hindering transactions. Kita's insurance is designed to address this market gap, aiming to provide necessary risk mitigation mechanisms that facilitate financing at scale. 

Under or non-delivery of carbon credits from ERW projects can be covered by Kita’s insurance, reassuring buyers and investors in ERW projects of their ability to meet investment or carbon goals. Kita has worked with experts at the Centre of Negative Carbon Emissions at Arizona State University to extend its underwriting capabilities to ERW. 

The Frontier Fund’s $57m advanced purchase of carbon from one of the ERW market leaders, Lithos, in late-2023 shows the significant level of demand for ERW. An expanding body of research has demonstrated its efficacy in large-scale field trials, yet as with all new technologies, some risk remains.  

“ERW needs to be a key part of the carbon removal solutions scaling over coming years. Our delivery risk insurance product will safeguard transactions and add an extra level of security to this growing market.  Particularly as we see more structured finance transactions enabling financing of ERW projects, our insurance is an enabler for project developers to access more efficient flows of capital.” 

- Tom Merriman, Chief Product Officer and Co-Founder, Kita 

What is ERW? 

Enhanced Rock Weathering (ERW) has been identified as a durable, highly scalable and permanent Carbon Dioxide Removal (CDR) technique that has the potential to scale-up to billions of tonnes of annual carbon removal. When applied on croplands, it can replace other types of soil amendments such as agricultural liming, leading to increased crop growth. 

ERW involves the spreading of specific types of crushed rock on fields, replicating the natural rock weathering process that is part of the long carbon cycle. The particle size of the crushed rock accelerates the weathering process, washing captured carbon into watercourses and eventually the ocean, where it helps to combat ocean acidity.  

Why does ERW matter? 

As the effects of climate change continue to worsen, CDR initiatives, like ERW, have grown indispensable in achieving net-zero emissions and meeting global temperature targets. For example, to use the UK as a case study: 

• it is expected that by 2050 ERW could deliver a net carbon removal of 6-30Mt CO2 per year, representing 45% of the atmospheric carbon removal required nationally to meet net-zero targets (Kantzas et al, 2022).  

• ERW was listed as a method to deliver emissions savings, in the UK Carbon Budget Delivery Plan and its co-benefits, including increased crop yields, decreased reliance on fertilisers, and rural job opportunities, strongly align with the UK’s Net Zero Growth Plan.  

• To scale this emerging technology and meet these ambitious targets, substantial investments into ERW are imperative. In the UK alone, for ERW to deliver its maximum net carbon removal potential, expenses could surpass £10 billion (based on estimated operational costs of up to £361 per tonne of CO2 (Renforth, 2012)).