Trafigura is active in both the compliance (mandatory) and voluntary carbon offset markets, and provides a suite of products and services to both carbon project developers and emitters.
Our work is focused in three priority areas:
- Offering a suite of services to customers looking to reduce the carbon footprint of their supply chain
- Working with developers of carbon projects to structure and finance new transactions and the expansion of existing projects
- Carbon trading and arbitrage in global compliance (mandatory) and voluntary markets
Trafigura is partnered with a wide range of carbon credit project owners. We are working with mature project owners seeking forward offtake agreements and novice project owners assessing feasibility. With our in-house technical carbon and financial structuring team, we are equipped to support at every stage of a project pipeline.
We are also supporting policymakers with the strategic development of carbon market mechanisms based on international standards and the provision of developmental and investment support in relation to the launch of carbon projects that complement new legislative aims.
We can assist our customers in managing their carbon exposure by providing carbon risk management guidance and support on navigating the EU Emissions Trading System (EU ETS) and its Carbon Border Adjustment Mechanism (CBAM).
The ability to specify the carbon footprint of commodities is important because it allows supply chain participants to map and identify the carbon emissions associated with every step of their value chain.
Carbon transparency is transforming client interaction, with a growing customer base seeking to produce and/or source commodities with lower carbon intensity in order to reduce their supply chain emissions and to minimise/reduce their environmental impact.
Our proprietary carbon calculator tool uses a variety of data inputs from leading industry providers to estimate the carbon footprint of a commodity, enabling our customers and Trafigura to choose options that minimise emissions at each point of the value chain.
Through our network of third-party experts, Scope 1, Scope 2 and Scope 3 greenhouse gas emissions data calculated are independently certified for public reporting requirements, for baseline assessment in relation to emissions reduction targets and carbon compensation planning.
We offer a number of carbon reduction initiatives and services that enable the physical reduction of the carbon intensity of customer operations.
These solutions include:
- The supply of market-based renewable power purchase agreements (PPA) or renewable energy certificates to reduce Scope 2 emissions
- The provision of alternative low-carbon fuels, such as biofuels, through our Biofuels Desk and the development of hydrogen and ammonia fuels opportunities
- The ongoing development of carbon capture and storage technology through our Clean Energy Venture Capital Fund.
We offer a number of carbon compensation options to customers, including bundled commodity supply, spot supply and retirement, and term offerings.
We also retain a portfolio of long-term primary and secondary registered projects across two broad categories:
Greenhouse gas emissions removal
Renewable energy projects
Forestry and land use
Increased biological uptake
Natural inorganic reactions
Compliance and voluntary markets explained
Compliance markets are mandated cap and trade programmes that effectively put a limit on what a region, country or company can emit. This enables a tradable carbon credit market with underlying fundamentals of supply and demand and a forward pricing curve, similar to the physical commodities that we trade.
Voluntary markets are non-mandated markets used mainly by carbon emitters to offset their unavoidable carbon emissions through the purchasing of carbon credits generated by projects targeted at removing or reducing greenhouse gas emissions from the atmosphere for tradeable value.
Delta Blue Carbon Project
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Delta Blue Carbon Project10 March 2022