Jul 2

Gunvor to Put $500 Million in Carbon-Free Investment

Stephen Bierman
Apr 1, 2021
cargo ship delivery in suez is carbon-free
Image: Ian Taylor via Unsplash

Gunvor, the Geneva-based energy trader, has created a new entity which will make carbon-free investments expected to reach $500 million, the company said in a March 30 release.

Gunvor unveiled the new unit, called Nyera, amid a push to cut certain emissions by 40 percent by 2025. Nyera will focus investments on carbon capture and storage, renewables fuels, renewable power and alternative fuels.

The most significant greenhouse gas emitters in Gunvor’s business include shipping from its own fleet and charters, as well as industrial activities in European refineries. It plans to reduce emissions at refineries via efficiency gains as well as shifts to carbon-neutral and renewable electricity for power.

The trader will convert all of its own fleet and its charters to more ecological vessels by 2027. This includes ships that use cleaner or carbon-neutral fuels, as well as efficiency and routing tracking.

Transitional commodities account for about half of Gunvor’s trading today, the company said. That includes biofuels (including the acquisition of plants), natural gas and liquefied natural gas. The company has halted physical coal trading.

The move comes amid an EU-wide green energy push, with renewable power generation overtaking fossil fuels for the first time last year.

Global trading houses are key in managing the flow of commodities to markets, handling surpluses and filling deficits, are seeking to lower emissions in general. Gunvor rival Trafigura seeks to cut carbon emission by at least 30 percent over the next three years, according to the Financial Times. Glencore has set a goal to reduce emissions to net zero by 2050.

It will be quite a challenge for traders, who depend heavily on shipping, to reduce carbon footprints. The maritime industry which carries most of the world’s commodities is only starting to transition to natural gas as a fuel in certain segments. While hydrogen and ammonia are potential cleaner replacements, ships are still built to depend on bunker fuel for long passages.

Stephen Bierman

Stephen Bierman is a finance and energy reporter with over 15 years of experience, including at Bloomberg News and Energy Intelligence.

Tweets at: @StephenBierman1

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