Major oil traders such as TRAFIGURA and Vitol are also actively investing in renewable energy as oil majors such as BP in the UK steer to strengthen their decarbonization strategies. (Picture is an image)
TRAFIGURA Group, together with IFM Investors, an agency investment firm, has established a joint venture company, Nala Renewables, to invest in renewable energy projects such as solar and wind power. In addition to its existing renewable energy projects, Nala plans to launch a 2 gigawatt (GW) class project with cumulative capacity within the next five years for new projects.
According to the plan, TRAFIGURA will install new facilities adjacent to mining, ports and other related facilities around the world that the Group develops, where it will supply the electricity generated. It has been announced that it expects to invest about $2 billion by 2025.
TRAFIGURA also acquired a stake in Hy2gen, a Green Hydrogen producer, and also set up a company to invest in energy storage technology. In addition, we are making full-scale moves toward decarbonization, such as proposing to the International Maritime Organization (IMO) to introduce a carbon levy system for ship fuel. Jeremy Weir, the company's chief executive, has announced that in addition to its mining, oil and natural gas businesses, renewable energy will be the three pillars of its business.
The world's largest independent energy trader, Vitol is investing in its hydrogen and power storage businesses. Swiss trader Mercuria has also revealed it is investing $1.5 billion with investment firms on renewable energy projects in North America.
In early December, Swiss trader Gunvor also announced that it had secured a $540 million loan facility for its biodiesel trading business. It plans to use the company to build a biodiesel storage business and two bio fuel treatment plants in Spain.
In early November, Rystad Energy announced a forecast of a peak of 102 million barrels per day in demand in 2028. Before the spread of covid-19, it was estimated to be 106 million barrels in 2030. The company expects crude oil production this year to be 89.3 million barrels, 94.8 million barrels in 2021 and 100 million barrels in 2023, against 99.6 million barrels in 2019.
Wood Mackenzie, on the other hand, has released estimates on the outlook for investments in renewable energy. According to the report, the Asia-pacific region will invest $500 billion in fossil fuel power generation, up from $1 trillion in solar and wind power investments by 2030. These trends are likely to accelerate further.
Naoya Abe
Former Bloomberg News reporter and editor
Capitol Intelligence Group (Washington D.C.) Tokyo bureau chief
Currently working as Managing editor of the news site MIRUPLUS
