Trafigura is committed to preventing, mitigating or minimising adverse impacts directly linked to its business. Nevertheless, from time to time our activities are called into question. In 2016, we first outlined our response to the ‘Dirty Diesel’ report published by the Swiss NGO Public Eye. The report highlighted the relatively high levels of sulphur and other toxic substances in diesel and gasoline sold in African countries and the adverse effects on human health.
At the present day, pollution in African cities remains a serious issue that demands action by African governments with the support of the international community. As part of our response, we have offered financial and advisory support to an initiative that will build a roadmap for implementation of African refiners (AFRI) compliant fuel across the African continent.
As we stated in 2016, our hope is that the attention now focused on this issue will lead to a coordinated initiative by those in a position to affect change. We remain committed to playing our part.
The price, availability and quality of vehicle fuel have significant impacts for Africa’s economies, air quality and communities. Although the diesel and gasoline demanded by African countries have improved in recent years, fuel standards on the continent still fall short of international best practice.
Trafigura is committed to help bring cleaner fuel to the continent. However, we also recognise that this is a complex issue that must ultimately be resolved by African governments. Each government determines the fuel specifications that need to be met in the respective countries.
Higher fuel quality standards have clear public health and environmental benefits. A common constraint is that countries with refining capacity will need to invest significantly in infrastructure to comply with tighter specifications. Access to affordable energy is critical for many communities and economies. The challenge is to help countries transition to cleaner, yet still affordable and plentiful energy sources.
A coordinated, continent-wide approach is clearly needed. We welcome and support the continuing efforts of the African Refiners and Distributors Association (ARA) which is working with governments, state oil companies and others to introduce improved fuel specifications across Africa.
ARA is an industry-funded organisation representing Africa’s refining industry and downstream supply chain. As active participants in Africa’s energy sector, both Trafigura and its downstream affiliate Puma Energy are members.
Since its formation in 2006, ARA has played a central role in improving fuel quality. In 2018, it submitted a proposal for consistent, cleaner fuel standards across the continent to the African Union Commission. Its proposed AFRI specifications for both fuel quality and vehicles would result in similar standards to those achieved in Europe. This would be achieved, for example, through EURO standards and other requirements.
The African Union (AU) has embraced these proposals. In 2019, it commissioned ARA to carry out a study into the benefits of supporting and implementing AFRI specifications across Africa. This was undertaken by CITAC Africa, an independent, specialist consultancy with detailed knowledge of the continent’s refinery and supply chain configurations.
The AU and ARA are now building on this work with a second phase study that is aimed at plotting a roadmap for implementation. CITAC Africa has again been commissioned. The three organisations will collaborate to obtain relevant data from refiners, state oil companies and downstream regulators.
As part of its support for this important initiative, Trafigura is providing 50 percent of the funding for CITAC’s supplementary research study.
The 2020 report will use this data to identify timelines and detailed costings across Africa to inform a roadmap for implementation. It will compare existing products from African refineries with the AFRI specifications, assess their current state and estimate any expenditure requirements to make them compliant with the new standards. Where relevant, it will also identify any costmitigation strategies that may reduce the investments required. The report will be shared with stakeholders and assist efforts to further improvements.
This data will be aggregated to produce country-level capital expenditure assessments for each of the 15 AU members. It will review the different costs of AFRIcompliant oil product imports regionally.
Improving fuel standards will bring economic benefits by enhancing African nations’ ability to share products and logistics across national boundaries. The report will allow governments to introduce cleaner fuels, while minimising adverse impacts for their economies and domestic energy sectors.
Trafigura will continue to actively engage to provide support and assistance throughout the process.