Trafigura’s global success is founded on our ability to evolve traditional supply chains to develop new markets. This expertise is profoundly relevant in today’s shifting energy landscape.
We are building our presence and position in the fast-evolving power and renewables sector through a series of strategic, targeted engagements.
Power and renewables trading
Our power and renewables trading desk builds on our capabilities and understanding of other energy markets.
We are establishing an active presence by trading key derivative contracts, primarily in US and European markets. This activity complements growth in physical transactions as demand develops for merchant and intermediary services in electricity markets.
Investing in renewable energy
Nala Renewables is a newly-formed joint venture between Trafigura and global institutional fund manager IFM Investors, that aims to develop solar, wind and power storage projects globally, with a total generation capacity of 4-gigawatts by 2025.
The company will have immediate access to 250-megawatts of Trafigura Group renewable energy projects currently in the pipeline, and will build on this existing portfolio by investing in renewable projects and companies at varying stages of development. It will also build and operate projects adjacent to the Trafigura Group’s mining, port and smelting infrastructure assets worldwide and the renewable energy generated will be used to power some of those facilities.
Nala Renewables will also provide an opportunity for Trafigura and selected third-party investors to invest into further renewable projects via the Renewables Fund of our investment subsidiary Galena Asset Management.
Through our part-ownership of renewable energy developer PASH Global, Trafigura also has a separate investment in a new 50-megawatt solar photovoltaic project in Mali. As West Africa’s largest solar farm, it will provide green electricity to over 91,000 households, saving nearly 52,000 metric tonnes of carbon emissions every year.
Development is underway for large-scale installations of photovoltaic panels at energy-intensive Trafigura investments and owned assets, including mines and logistics terminals. Metal processing is one of the most energy-intensive of all industrial activities. Trafigura's zinc and lead smelting operation Nyrstar is investing in large-scale batteries and renewable energy generation at its global network of plants.
It is developing over 100-megawatts of sustainable energy for its own operations, with surplus power to be sold back to the grid, assisting in the expansion of its trading business.
Investing in disruptive renewable technologies
Trafigura has created a corporate venture capital fund to invest in a number of early-stage disruptive renewable technologies including hydrogen power and alternative fuels, renewable energy storage technologies and carbon capture and utilisation.
Trafigura will support these companies by leveraging its expertise and global network, all in an effort to bring their technologies to market at scale and help accelerate the energy transition.
As part of Trafigura’s series of investments in clean energy technologies including in low-carbon fuels needed for the energy transition, the company has invested in C-Zero Inc., a technology developer for low carbon hydrogen production. The funding will be used to build C-Zero’s first pilot plant, which is expected to be online in Q1 2023. The plant will be capable of producing up to 400 kg of hydrogen per day from natural gas with no CO2 emissions. C-Zero’s methane pyrolysis will use natural gas to produce low carbon hydrogen and carbon black – a product used today in the production of tyres and inks and with a wealth of prospective applications in activated carbon, building material and others.
Other investors in C-Zero include SK Gas, a subsidiary of South Korea’s third-largest conglomerate, the SK Group; Engie New Ventures; Breakthrough Energy Ventures; Eni Next; Mitsubishi Heavy Industries and AP Ventures.
Trafigura has invested in Swiss climate tech company Daphne Technology whose developed a pivotal technology for reducing greenhouse gas emissions emitted by the maritime industry and other hard to decarbonise industries. Daphne Technology, which spun off from the Swiss Federal Technical Institute (EPFL) in 2017, uses technology to remove toxic and GHG emissions such as nitrogen oxides, and methane from the combustion gas of any fuel type, including oil, LNG, biofuels, ammonia, and hydrogen. The technology breaks down pollutants, converting them into non-hazardous by-products, which are either released into the environment or transformed into valuable products.
The ability to capture emissions from hydrocarbon maritime fuels and meaningfully reduce emissions in the short-term is a critical component of the industry's transition to net zero emissions, in which multiple fuels and multiple abatement solutions will be required.
Strategic investments in the hydrogen sector
Hydrogen, especially green hydrogen, which is produced from renewable energy sources, has significant potential to accelerate the energy transition as the world moves towards lower-carbon economies. Its greater energy density-to-weight ratio makes it more suitable for higher energy industrial uses than the lithium-ion based technologies that feature in many of today’s electric vehicles.
Hydrogen fuel-cell powered electric engines also benefit from higher efficiencies than internal combustion engines and the market for this type of technology has grown substantially in recent years. In addition, we see potential applications for hydrogen in running off-grid mines and producing chemicals.
We have taken an equity stake in start-up Hy2gen. The German-based company brings together specialists with experience of developing, building and operating plants for the production of green hydrogen and hydrogen-based e-fuels, offering better ways to achieve CO2-free or CO2 neutral fuels and storage solutions. The first plants will be built in Canada, followed by other plants in France, Mexico, Norway and South Africa. The company aims to become a leader in the hydrogen and e-fuels market for mobility and industry, areas where it is currently proving difficult to significantly reduce emissions.
Trafigura has also made significant investments with H2 Energy Holding AG, a business innovator in green hydrogen solutions for use in heavy duty transport. In partnerships with large industrial players and market leaders such as Hyundai, Alpiq and Linde, H2 Energy are the first in the world to deliver fuel cell trucks to commercial users and to create an ecosystem based on green hydrogen, while operating with a strong commercial focus. The trucks are already in operation for large transporters and retailers in Switzerland.
We have committed to invest an initial USD62 million, with USD20 million as capital injection into H2 Energy Holding AG to further support the development of the production, storage and distribution of green hydrogen for refuelling stations and industrial customers. The remaining part of the investment will be provided to seed and fund the development of a 50:50 joint venture based in Zurich that will roll out green hydrogen-based ecosystems and to invest in hydrogen infrastructure and hydrogen application-related projects across Europe, excluding Switzerland.
Trafigura has also made an equity investment in OneH2, Inc., headquartered in North Carolina, USA, a provider of hydrogen fuel supply and logistics solutions. OneH2 provides scalable hydrogen fuel production systems coupled with cost-effective delivered hydrogen fuel for use in transportation markets across a growing network in North America. OneH2 currently serves the forklift market and is developing projects for the heavy truck market as well as other transportation sectors.
Investing in energy storage
Efficient energy storage has a critical role in the low carbon economy. Effective storage systems are essential in integrating intermittent renewable energy into grids by aligning peaks and troughs in power generation with changing patterns of demand. Our strategic investment in Quidnet Energy, a clean energy business, is helping to deliver a cost-effective alternative to hydro-pump storage. Quidnet’s geomechanical pumped storage (GPS) system is based on hydro-power principles. It pumps water underground to be stored in rock formations at high pressure. At times of high demand this is released to the surface, where it powers electricity turbines.
Trafigura’s second investment in this area is in Malta Inc., a leading innovator of grid-scale, long-duration energy storage. Malta’s new technology collects and stores energy from any power generation source in any location, enabling reliable and predictable operation of the grid.
Based in Cambridge Massachusetts, Malta Inc. has developed a Pumped Heat Energy Storage (PHES) system to provide long-duration, large-scale, cost-effective, and safe energy storage. Malta’s system stores electricity as thermal energy and then re-generates the electricity on demand for up to 200 hours, meeting daily and weekly needs. Malta’s PHES system also generates clean heat for industrial and district heating applications. The company was originally incubated at Google’s Moonshot Factory, X, and is backed by energy industry leaders Alfa Laval, Proman, Chevron Technology Ventures, as well as investors Breakthrough Energy Ventures, Concord New Energy Group and Piva Capital.
Providing modern energy
Inaction on the clean cooking crisis is costing the world over USD2.4 trillion each year. The use of charcoal and wood result in significant emissions of greenhouse gases and black soot, and in deforestation. The lack of modern cooking solutions also has negative health and gender equality consequences, and results in lost economic opportunities. Access to modern clean cooking services using Liquefied Petroleum Gas (LPG) is significantly cleaner and a vital step in the energy transition to low and zero-carbon sources.
As a global leader in LPG Trafigura has invested in Bboxx, a next generation utility, to accelerate progress on meeting United Nations Sustainable Development Goal 7 (UN SDG 7) – clean energy for all – in Africa. Bboxx manufactures, distributes and finances decentralised solar powered systems in developing countries, operating across Africa and Asia, and in the ten years since Bboxx was founded, it has positively impacted over one million people through clean energy. Trafigura’s minority equity investment comes as Bboxx embarks on the next phase of its growth and accelerates its clean cooking commitments – a key part of tackling energy poverty and meeting UN SDG 7.
This landmark agreement brings together complementary expertise to fast-track progress on clean cooking access in Africa. Bboxx’s innovative Internet of Things (IoT) technology and experience from its established Pay-As-You-Go (PAYG) Solar Home Systems business, are all needed to deliver clean cooking in a scalable and distributed model. Bboxx has been applying this expertise to PAYG LPG clean cooking through pilots in the Democratic Republic of Congo (DRC), Rwanda and Kenya. It has been ramping up efforts in the DRC after receiving funding from USAID to roll out a PAYG LPG clean cooking access programme.