Trafigura's Impala Terminals starts freight service to manage carbon footprint

Impala Terminals, the logistics arm of commodity trading house Trafigura, has started a freight service for non-ferrous metals and minerals, in which customers can manage their carbon footprint, it said March 8.

This service will provide visibility in the indirect greenhouse gas, or GHG, emissions under Scope 3, generated by the transport of non-ferrous metals and minerals via containers.

Customers can offset these emissions "by providing essential funds to impactful carbon finance projects across the world," the statement said.

With more and more global companies pledging to reach net zero carbon by 2050, programs to offset CO2 emissions are becoming very popular.

"We can now help our customers, including raw material suppliers for the electronics, batteries and electric vehicle industries, to measure and offset greenhouse emissions along their supply chain," said Nicolas Konialidis, CEO of Impala Terminals.

Trafigura already offers a carbon neutral freight service in exporting nickel precipitates from Terrafame's mine and refinery in Sotkamo, Finland to China.

The carbon neutral freight service is independently verified by environmental consultancy Natural Capital Partners.

Emission reduction strategy

This comes as Trafigura recently pledged to cut its own emissions under Scope 1 and 2 by 30% within three years, which equates to a reduction of more than 1 million mtCO2e.

Scope 1 covers direct emissions from owned or controlled sources, while Scope 2 covers indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the reporting company, according to the Carbon Trust. Scope 3 includes all other indirect emissions that occur in a company's value chain.

Trafigura's total GHG emissions under Scope 1, 2 and 3, excluding investments, were at 13.48 million mtCO2e in 2020 compared to 11.32 million mtCO2e the previous year, according to its 2020 responsibility report.

"Our total reported GHG emissions of 15.35 million mtCO2e in 2020 include 1.87 million mtCO2e of Scope 3 emissions from investments," the Trafigura report said.

Trafigura, like many of its peers, is also starting to diversify its trading strategies to adapt to energy transition.

With an increasing global focus on decarbonization and low-carbon fuels, Trafigura built a renewable and power trading division this year to position itself well for energy transition.

The trading house expects these changes to result in market disruptions, and provide business opportunities.

"The energy transition will require significantly more copper, nickel and other metals, and so far, investment in these areas has been lagging behind future projected needs," Trafigura's Chief Economist Saad Rahim said in the 2020 annual report.

Trafigura recently said it would invest $62 million into building a logistics and infrastructure-based hydrogen ecosystem around Europe, as it partners with other large industrial players.