Connecticut enacts surcharge on fossil fuel insurance to fund climate resilience initiatives

March 06, 2025 | House Bills, Introduced Bills, 2025 Bills, Connecticut Legislation Bills, Connecticut


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Connecticut enacts surcharge on fossil fuel insurance to fund climate resilience initiatives
Connecticut's House Bill 7174 is making waves as it seeks to reshape the state's approach to environmental protection and climate resilience. Introduced on March 6, 2025, the bill aims to enhance fish passage at dams and impose a new surcharge on insurance policies for fossil fuel infrastructure, marking a significant step in the state's climate strategy.

At the heart of the bill is a provision requiring the Commissioner of Energy and Environmental Protection to establish regulations ensuring safe and effective fish passage for existing fishways at dams not under federal jurisdiction. This move addresses critical ecological concerns, aiming to protect aquatic habitats and promote biodiversity in Connecticut's waterways.

However, the bill's most contentious aspect lies in its financial implications. Starting January 1, 2026, a five percent surcharge will be levied on property and casualty insurance policies related to fossil fuel infrastructure, including pipelines and refineries. The revenue generated from this surcharge will be directed to a climate resilience account, which will fund initiatives such as flood risk data dissemination and grants for communities to build climate-resilient infrastructure.

Debate surrounding House Bill 7174 has intensified, with proponents arguing that it is a necessary step toward combating climate change and protecting vulnerable communities from flooding. Critics, however, express concerns about the financial burden on businesses and the potential impact on energy costs.

Experts suggest that the bill could have far-reaching implications for Connecticut's environmental policy landscape. If passed, it may set a precedent for other states to follow suit in implementing similar measures aimed at reducing reliance on fossil fuels and enhancing climate resilience.

As the bill moves through the legislative process, stakeholders are closely watching its progress, anticipating both the potential benefits and challenges it may bring to Connecticut's environmental and economic future.

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