The world must immediately stop releasing carbon and remove excess carbon from the atmosphere if it is to combat climate change. Kita’s focus is carbon removal, insuring “carbon delivery risk” to enable carbon removal solutions to scale.
The Intergovernmental Panel on Climate Change states we need to remove billions of tons of CO₂ annually for the remainder of the 21st century to enable a liveable and sustainable future for all. This is 20 million tons of CO2 per year that humans are consuming oil and other gas products. If it takes a trillion-dollar oil and gas industry to emit 20 billion tons of CO₂, then a trillion-dollar carbon removal industry will be needed to remove that same amount by 2050.
This is a large-scale task of unprecedented magnitude and speed, which presents a huge opportunity to create a new market for insurance. To enable this rate, insurance is also essential. This can’t happen soon enough, and it is why Kita’s focus is on developing innovative new insurance products in the emerging carbon removal space.
Carbon removal solutions typically generate revenue by selling carbon units on the voluntary market. This market must grow at least 15 times by 2030 in order to meet net-zero targets. Challenges within the voluntary carbon markets include lack of transparency and consistent risk management, leading to significant transaction risk – pre-sold carbon units have a risk of being underdelivered. This uncertainty results in inefficient capital flows for high-quality carbon reduction projects.
Kita’s insurance products cover carbon delivery risk, removing a significant protection gap for both buyers and sellers in the market. An increase in buyer trust in carbon delivery will result in increased capital flows to aid carbon removal projects. Carbon removal projects that have insurance can be priced higher and attracted more investment by attracting inward capital.
This pre-seed round will accelerate Kita’s product build and hiring to launch its essential carbon insurance products.
“The world is in a climate crisis, and carbon removal is an essential part of the solution. But carbon removal is still new and carries unique risks. Lack of insurance to protect against these risks is hindering the development that the world requires. Kita believes insurance is a crucial enabler – by removing risk and increasing trust in the market, insurance will help drive capital to help quality carbon removal projects scale. We are passionate about bringing these dedicated carbon insurance products to market and we are thrilled to be working with Insurtech Gateway to do it at speed.” Natalia Dorfman is Kita’s Co-founder and CEO
“Kita has found a very interesting role for insurance to play in accelerating the growth of carbon removal markets, and we believe the Kita team are the best people for the job. We are excited to help them get their product into market.” Stephen Brittain, Co-Founder, Insurtech Gateway.