On October 20, carbon removal registry Isometric introduced an insurance framework, developed with broker Marsh, that lets developers of Isometric-certified reforestation projects replace part of their buffer pool contributions with insurance. Five providers — Artio, CarbonPool, CFC, Kita and Oka — are approved to offer the coverage, and other insurers can apply to join. The promise is straightforward: fewer certificates locked in reserve, more revenue in a project’s early years.
The question that decides whether this is progress or dilution is narrower: under what conditions can an insurance policy stand in for part of a buffer pool without weakening the reversal protection the pool exists to provide?
What the buffer pool is doing in the first place
A buffer pool is the carbon market’s self-insurance. A share of every project’s issued certificates is withheld into a shared reserve instead of being sold. If a project later loses stored carbon — a wildfire, a disease outbreak, a failed plantation — certificates from the pool are cancelled against the loss, so a credit a buyer already retired still represents a tonne of carbon removed. It is the same integrity machinery we walked through in how carbon credits are accounted for under the GHG Protocol.
The cost of that protection is real, and it is timed badly. Withheld certificates cannot be sold, and the withholding bites hardest in a project’s early years, when planting and operating costs are at their peak and revenue is thinnest. Every certificate in the pool is integrity you can point to — and cash the project does not have.
What the framework actually changes
Two features of the design matter more than the headline. First, the substitution is partial: insurance replaces part of a project’s buffer contribution, not the buffer itself. Marsh’s Hema Mistry, CEO of FINPRO UK at Marsh Risk, describes the framework as establishing requirements for using insurance alongside existing buffer mechanisms. Second, it is gated: the policy must meet Isometric’s requirements and come from a provider the registry has approved. The registry, not the developer, decides what counts as an adequate substitute.
Isometric’s chief commercial officer, Lukas May, states the design intent plainly: the framework gives developers “more flexibility when the economics matter most, without compromising on the safeguards that ensure every certificate buyers retire represents a tonne of carbon removed from the atmosphere.” Bruno Figueiredo, VP of Finance at reforestation developer Mombak, calls it “an important step toward a more mature carbon market,” arguing insurance can give buyers greater certainty while developers manage reversal risk more efficiently.
When substitution holds up — and when it weakens protection
Whether an insured buffer is as strong as a stocked one depends on terms that are not yet public. Isometric has not disclosed pricing, coverage limits, eligibility thresholds or an implementation date — so the honest answer today is conditional. The conditions that decide it:
- The insured perils must match the pool’s perils. The pool absorbs reversals from fire, disease and project failure alike. A policy that covers fire but excludes disease or insolvency substitutes for only part of the risk while releasing the whole contribution.
- The payout must restore certificates, not just compensate the developer. Buffer protection runs to the buyer and the registry: reversed tonnes get cancelled and replaced. A cash payment to a developer who may no longer be operating does not, by itself, retire a replacement tonne.
- The term must face the horizon. Reversal obligations run for decades; insurance is typically written in years. Substitution holds only if renewal, replacement or registry step-in rights are enforced for as long as the certificates are outstanding.
- The residual buffer must cover what the policy excludes. Partial substitution is the framework’s own safeguard — the remaining pool has to be sized against the uninsured remainder of the risk, not just reduced by a fixed percentage.
- The gate must be real. Approved-provider status is the mechanism that keeps substitution from becoming a race to the cheapest paper. Who approves, on what capital and claims standards, and what happens when a provider exits, decides whether the gate holds.
Why this matters beyond reforestation
Isometric says it is exploring whether the framework can extend to other removal pathways beyond reforestation. If it does, the pattern generalizes: reversal risk starts being priced by underwriters instead of being absorbed silently by a pooled reserve. That is what Figueiredo’s “more mature market” line actually points at — a market where integrity has a priced, inspectable instrument behind it rather than only a withheld percentage.
It also changes the buyer’s diligence question. “How large is the buffer?” was always a proxy. The better question, once insurance enters the structure, is “what stands behind the buffer — certificates in a pool, a policy from an approved carrier, on what perils, for how long, and paying whom?” A framework that forces that question into the open strengthens the market even before a single policy is bound. One that leaves the terms undisclosed will be judged, fairly, on the first reversal that tests it.
We cover the broker’s side of this framework — what to check before placing the coverage — at Risk Coverage Hub.