Trafigura, Braskem team up on first carbon-neutral naphtha trade

Commodity trading house Trafigura has teamed up with Brazilian petrochemical producer Braskem in what they described as the first carbon-neutral sale of a naphtha cargo, both companies said April 26.

The naphtha cargo was shipped last week from Corpus Christi in Texas, US, and is destined for Braskem's facility via the Port of Aratu in Bahia, Brazil.

The CO2 emissions associated with the extraction, pipeline transportation of crude oil, processing to produce naphtha and shipment of the 325,000-barrel carbon offset cargo, will all be calculated in the trade, the statement said.

These emissions will be offset through a combination of efficiency measures along with some carbon offsets programs. The carbon offsets have been sourced from nature-based projects located in Indonesia that are independently verified by the Verified Carbon Standard, the companies added.

Trafigura also said it has worked with the vessel owner "to minimize actual emissions associated with transporting the cargo including by chartering the most energy efficient vessel available at the time of fixing and by agreeing with the ship owner that a speed reduction is made."

GROWING TREND

Such transactions are gaining ground as more energy companies are committing to net zero targets. These carbon offset programs provide an outlet for these companies to reduce carbon footprint.

Naphtha emits 68.02 kilograms of CO2 per MMBtu, according to the US Environmental Protection Agency.

This is determined by multiplying heat content times the carbon coefficient times the fraction oxidized times the ratio of the molecular weight of CO2 to that of carbon, according to the EPA.

On April 9, Trafigura said it was launching it will launch a carbon trading desk, with teams based in Geneva, Houston and Singapore for which it plans a recruitment drive, in response to demand from customers and to augment its existing commodity trading activities.

The trader focuses on crude and petroleum products, non-ferrous concentrates, refined metals and bulk commodities such as coal and iron ore, and its move into carbon trading underscores the growing importance of carbon markets in relation to other commodities.

NATURE-BASED PREMIUM

Nature-based carbon offsets derive from projects that protect and restore natural ecosystems such as forests, grasslands and wetlands.

In Xpansiv's CBL spot market, the N-GEO contract was heard trading around $4.00/mtCO2e in week 16 to April 23, representing a premium over CORSIA-eligible carbon (CEC) credits, assessed by S&P Global Platts at $2.10/mt CO2e April 23.

CORSIA credits meet standards set by the International Civil Aviation Organization.

Representatives at Trafigura and Braskem were unavailable for comment, when asked on the pricing of these carbon offsets.