Sound environmental performance underpins commercial performance. We aim to minimise any adverse impacts from our business operations on the natural environment. We want to play our part in supporting the worldwide transition to low-carbon energy sources. We are adapting our business to meet the risks and opportunities of climate change with a new Power and Renewables division and by setting targets to reduce our greenhouse gas emissions and install renewable power.

 

 

 

06 January 2021

Trafigura’s environmental performance over 2020 and the setting of greenhouse gas reduction targets across the Group

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Trafigura's environmental performance over 2020 and the setting of greenhouse gas reduction targets across the Group

06 January 2021

 

 

Environmental management

We are committed to protecting the environment and to playing our part in the energy transition to low- and zero-carbon sources. We set challenging targets and monitor performance indicators that strengthen our ability to manage our environmental impacts. We engage with our suppliers, customers and trading partners and the many stakeholders in our business to understand, manage and mitigate our risks and impacts more effectively.

Our approach

Our overall approach to managing environmental impacts reflects our status as one of the world’s leading commodity traders, with a portfolio of interests in industrial assets, storage and handling facilities, logistics and downstream operations. We aim to adopt, develop and promote best practice across our business. If current practice falls short of this standard, we seek to improve the areas we can affect directly and influence our partners to make improvements where we do not have operational control.

In 2019, we set ourselves a target of expanding our environmental performance reporting. This has been achieved in numerous ways, with more granular reporting, improved accuracy and increased scope.

Effective management of our environmental impacts is critical in a world where sound environmental performance underpins financial and community support and business partnerships. We focus on reducing the risk of environmental incidents and mitigating any negative impacts. We also aim to help facilitate a smooth and swift transition to the low-carbon economy.

We are building our knowledge and evolving a more holistic sense of our long-term environmental impacts. In a changing world, where environmental and commercial performance are increasingly seen as indivisible, our priorities are also changing. Our environmental strategy has moved beyond a narrow focus on mitigating risk. It now informs core business strategy and is stimulating innovation and business transformation. 

Climate change

Our approach to climate change risk management is aligned with the priorities set out by the Task Force on Climate-related Financial Disclosures. In this report, we follow their guidance by reporting on governance, strategy, risk management, metrics and targets.


Highlights

Achievements

  • Enhanced reporting of our GHG emissions, including external verification and increased number of Scope 3 categories.
  • External physical climate change risk assessment completed at high-risk sites.
  • Stepped up international engagement to advance the decarbonisation of shipping.
  • New zero-carbon logistics service offer by Impala Terminals.

GHG emissions reduction targets

  • 30 percent reduction in operational emissions by the end of FY2023.
  • Set a Scope 3 emissions reduction target by FY2023.
  • Install two gigawatts of renewable power generation capacity by the end of FY2025.


Responding to climate change

Climate change is perhaps the most urgent issue of our time and there are particular implications for our industry. Some of the commodities we trade are essential for the energy transition and demand is rising. For other, more carbon-heavy commodities, we anticipate increased regulation and falling demand.

We recognise and respond to the latest scientific assessments as set out by the United Nations Intergovernmental Panel on Climate Change. We are ramping up our efforts to reduce emissions and provide commodities that are essential for the transition to a low-carbon economy in a manner consistent with the goals of the Paris Agreement.

The HSEC Steering Committee, chaired by independent non-executive director Andrew Vickerman, and the Climate Change Group, which was formed in 2018 and comprises senior managers from across the business, are responsible for overseeing, guiding and shaping our climate strategy.

How Trafigura is seeking to reduce its greenhouse gas emissions

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How Trafigura is seeking to reduce its greenhouse gas emissions

22 January 2021

Reducing maritime carbon emissions

Trafigura is one of the world’s largest charterers, responsible for over 4,000 voyages annually. Across the fleet, we are committed to lowering our carbon footprint.

Reducing maritime carbon emissions

Maritime transport carries close to 80 percent of global trade and accounts for 2-3 percent of total global GHG emissions. With trade increasing, emissions from shipping could grow by as much as 130 percent by 2050 compared to 2008 levels if no action is taken, according to some estimates.

Significant reductions in maritime emissions will be hard to achieve in the short term and calls for a collective, sustained effort. The ships in use, the fuels that power them and the related infrastructure all need to change. Managing this change is a key challenge for our industry. We have established the role of Head of Fuel Decarbonisation to manage this risk and develop our future shipping fuels strategy.

The International Maritime Organization (IMO) has adopted measures to reduce emissions from international shipping, using MARPOL the marine pollution prevention treaty, the Energy Efficiency Design Index (EEDI) for all new ships, phased to require increasing levels of fuel efficiency, and the Ship Energy Efficiency Management Plan (SEEMP) for all existing shipping.

IMO’s declared ambition is to reduce carbon intensity by at least 40 percent by 2030 and to aim for a 70 percent reduction in intensity by 2050. It intends to reach peak international shipping emissions as soon as possible and then, progressively, to bring total annual emissions down to reach at least 50 percent of the 2008 level by 2050. We will play an active role in helping to achieve at least these targets.

We are taking independent action to reduce our own emissions and to improve emissions intensity reporting from our owned and chartered fleet. The addition of a marine expert in the Corporate HSEC team has extended our ability to provide support for process improvements and to pinpoint emission reduction opportunities, such as vessel optimisation, course adjustments and steaming speeds.

Shipping accounts for 58 percent of Trafigura’s total GHG emissions. By improving fuel efficiency we can have a meaningful impact on our overall emissions. We continue to seek ways to minimise bunker usage and improve operational efficiency across the fleet. We employ fuel-saving measures when possible, such as slow steaming and weather routing, and we are establishing processes through which we aim to charter more fuel efficient dry-freight vessels.

We began a trial of the RightShip A to G GHG rating system for dry-freight charters during 2020. As F- and G-rated vessels are less fuel-efficient, excluding these from our fleet will reduce average shipping emissions. Modelling suggests dry-charter emissions can be reduced by around 11 percent on a like-for-like basis.

Trafigura Insights Blog
Trafigura Insights Blog

Trafigura Insights Blog

Time for a carbon levy on shipping fuel

 

 

Energy transition

The global economy is in a transformational phase as the world transitions to a different, more sustainable energy mix. Trafigura is well placed to adapt to changing market dynamics.

Transitioning to a low-carbon economy

Trafigura is playing its part in the transition to a lowcarbon economy by efficiently and responsibly supplying the vital commodities that will be required.

Commodities such as lead, nickel and cobalt are required for batteries; aluminium is important in the construction of lighter, more efficient vehicles; zinc, through the galvanizing process, protects steel from corrosion; and copper is essential for electrification and a wide range of renewable energy solutions.

We consult widely with stakeholders to understand their concerns and have in-depth conversations with banks, partners, suppliers, customers, NGOs and wider society. Where relevant, we use our leverage and influence to alter trading partners’ behaviour. We also engage actively in international debate; learning, responding and contributing to current thinking.

Environmental, social and corporate governance considerations are high on the agenda for our trading and financial partners. We are responding to increased interest from investors and consumers in low-carbon solutions with initiatives such as the low-carbon aluminium financing programme (see next page), which allows us to offer premium prices for qualifying materials. In the coming years, we will identify the carbon footprint associated with other commodities.

Investing in renewable power, establishing our lowcarbon aluminium desk and Impala’s zero carbon logistics offer are three ways that we are meeting new customer priorities. Across the Group, we are working closely with partners who share our commitment to reducing climate change impacts.

We need to be ready to service new markets as these develop. We are investing now to build out our competencies and capabilities. Our strategic stake in Hy2gen and our recent USD66 million investment in H2 Energy are extending our understanding of green hydrogen production techniques. Through our investment in Quidnet Energy, we are learning more about power storage dynamics. We are also engaging with companies involved in providing new fuels for shipping.

2020 Responsibility Report
2020 Responsibility Report

2020 Responsibility Report

Download the report