Trafigura’s Hannah Hauman and Malihah Shah provide insight into how through adapting best practices from other commodity markets, supply chain managers and trading companies have a vital role to play in helping to manage risk and ensure removals projects can achieve scale and meaningful climate impact.

Carbon removals, as an electronic certificate recorded in a registry ledger, are often oversimplified in terms of their ease of production. However, behind these virtual tonnes are very real physical assets with complex operations and risks, not dissimilar to those faced in the traditional physical commodities sector. The categories and associated risks can be dizzying for even the most experienced agronomists and technologists, let alone for corporates otherwise occupied with decarbonising their core industrial businesses. Consequently, traditional physical commodity players bring a unique skillset in managing physical asset risk and connecting markets: enabling solutions at scale by managing three key risk parameters and enablers: delivery, specification and financial tools.

This paper was an original contribution to the Oxford Institute for Energy Studies Energy Forum journal on The evolution of carbon markets and their role on climate mitigation and sustainable development first published on 24 June 2022 .

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