A new Views & Comments article published in Engineering highlights that insufficient and underdeveloped insurance coverage for emerging hydrogen technologies risks slowing the global net-zero energy transition, calling for closer collaboration between engineers, industry, academia, and insurers to address unmanaged risks and unlock wider deployment. The authors argue that hydrogen generated via net-zero processes can support decarbonization only if production, storage, transportation, and utilization systems advance rapidly and at scale, yet such novel engineering systems carry inherent risks including high flammability, material embrittlement, and leakage hazards that are not yet fully addressed by current insurance frameworks.

The article notes that while insurance is widely recognized as essential for securing investment and managing operational risks in the energy transition, insurance cover for the hydrogen economy remains in its infancy, with limited tailored products especially for heavy industry applications. Adapting existing high-temperature processes or deploying new hydrogen systems introduces a broad set of evolving risks, spanning property damage, component liability, employee and public safety, cyber threats, and directors’ and officers’ personal liability, as well as business interruption from immature supply chains or under performance during system commissioning. Insurers face challenges in quantifying these risks due to limited historical operational data, which can lead to overly cautious underwriting, restricted coverage options, or elevated costs that hinder project financing.

By comparison, the insurance market for mature renewable technologies such as wind and solar has become increasingly sophisticated, with expanded offerings including parametric insurance and supply chain coverage, supported by improved risk data and standardized practices. The authors suggest hydrogen insurance could follow a similar maturation pathway, but accelerated progress requires structured data collection, clearer risk characterization, and innovative policy design. They highlight parametric insurance and performance warranty cover as adaptable tools that can provide predefined payouts or protect against underperformance, supported by academic modeling to improve risk assessment.

The article emphasizes that insurers have strategic incentives to engage, both to manage climate-related portfolio risks and to access a new industrial market, yet disconnects persist between innovator needs and insurance capabilities. It advocates sustained multi-stakeholder dialogue starting at early technology readiness levels, with academia acting as a bridge to gather risk data, co-design research priorities, and support standardization and certification that helps insurers quantify and underwrite risks more effectively. By integrating risk management and insurance considerations into engineering innovation at an earlier stage, the sector can reduce barriers to investment, streamline market adoption, and better align hydrogen development with global net-zero strategies.

The paper “Insurance for New and Adapted Hydrogen Processes,” is authored by Elisabeth Shrimpton, Nazmiye Balta-Ozkan. Full text of the open access paper: https://doi.org/10.1016/j.eng.2025.11.018. For more information about Engineering, visit the website at https://www.sciencedirect.com/journal/engineering.