The global insurance market for hydrogen projects could be worth more than $US3 billion ($4.64 billion) by 2030 as demand for cleaner energy grows, according to Allianz Commercial.

Hydrogen is expected to play a key role in green technologies, with the number of projects utilising the element increasing by 600% in the past four years, from 200 to 1500.  

Allianz says for demand to be met, $US680 billion ($1.05 trillion) of investment may be required in the next five years, with the insurance industry expected to address risks across supply chains, construction and production of hydrogen infrastructure.  

It highlights emerging uses in decarbonisation, power generation, renewable infrastructure, transport and heating industries.  

“Insurers have a key role to play in the development of the hydrogen economy, enabling investment and innovation, and providing risk management advice and guidance,” Allianz Commercial global head of natural resources Anthony Vassallo said.

Allianz warns rapid growth of hydrogen-related infrastructure will cause a “range of challenges” for insurers, including the dangers of leakage and combustion. Hydrogen’s small atoms can permeate and weaken traditional building materials such as steel, and manufacturers are looking to develop prototypes that can withstand unique fire risks.

Mr Vassallo says training and equipment maintenance will be essential, while organisations must act to prevent losses from business interruption, natural hazards and other third-party liabilities.  

“Given the wide reach of the hydrogen value chain and its potential uses, the implications for insurance could be far-reaching, touching on multiple sectors and lines of business over the next decade,” Mr Vassallo said.  

“However, from an exposure and potential claims perspective, product lines such as energy, natural resources and liability are likely to see the biggest impact from hydrogen risks over the next five to 10 years, followed by property and marine.”