Trafigura announced on Friday it will set up a carbon trading desk as more companies look to offset greenhouse gas emissions generated from the energy and commodity supply chains.
Hannah Hauman, the trader's head of crude oil in Europe, has been named global head of carbon trading to lead a team based in Geneva, Houston and Singapore. Trafigura has plans for additional hires.
Hauman first joined Trafigura subsidiary Puma Energy to lead its bitumen trading in 2016 before working for Shell as a middle distillates trader for two years, according to her LinkedIn profile.
“We are delighted to announce the formation of a dedicated carbon trading team which will enable us to respond to customer demand, whilst supporting investments in decarbonisation projects globally,” Trafigura executive chairman and chief executive Jeremy Weir said in a statement.
“This is an important development for the company which we believe has the potential to contribute significant future growth.”
The trading giant suggested its entry should bring increased liquidity into the carbon market by connecting producers of carbon offsets with oil, metals and minerals producers and end users.
Conor McFadden, which trades West Texas Intermediate crude futures in Houston for Trafigura, will be relocating to Geneva to take over the European crude desk.
Banks and trading houses rushed to enter carbon trading after the market was established in 2005 as part of the Kyoto Protocol to combat climate change.
Most of them have withdrawn from the niche spectrum or scaled down their operations over the years, largely due to the collapse in demand for carbon credits generated from the United Nations Clean Development Mechanism.
But some believe the market is entering a renaissance phase, as many energy, shipping and commodity companies could require carbon offsets after establishing their own emissions targets.
The European Union's Emissions Trading System is also expected to enjoy a boom period ahead, with potentially lower supply and higher emissions goals.
Trafigura said both regulated and voluntary carbon offset markets will have an important role to play in a “carbon neutral” world.
Last month, the company used voluntary credits to offset a condensate shipment for the first time. The 650,000-barrel cargo was supplied from Woodside's Burrup hub in Australia.
Trafigura has aimed to reduce operational greenhouse gas emissions by at least 30% by the end of financial year 2023, compared to 2020 levels.
The trader has also pledged to set a target for reducing its indirect, or Scope 3, emissions by 2023. Shipping makes up 70% of those emissions.
