Trafigura Forges Alliance with Greenergy to Expand Biodiesel and Fuel Retail Ventures

Commodity trading giant Trafigura Group has reached an agreement to acquire the European operations of biodiesel producer and fuel supplier Greenergy from Brookfield Asset Management. This move comes as part of Trafigura's strategic efforts to capitalize on the recent volatility in energy markets and to invest in assets poised to benefit from the global transition away from fossil fuels. Additionally, Trafigura aims to expand its portfolio of conventional energy distribution assets, including storage terminals, refineries, and fuel stations.

While Trafigura did not reveal the financial details of the agreement in its Monday statement, it's worth mentioning that Greenergy runs biodiesel manufacturing facilities in Teesside and Immingham, UK, along with operations in Amsterdam, The Netherlands. Moreover, Greenergy boasts a significant wholesale road-fuel distribution business, having supplied approximately 14 billion liters (3.7 billion gallons) of fuel to independent retailers and supermarket chains last year.

As Europe continues its transition toward a lower-carbon future and the refining industry adjusts to evolving market dynamics, companies like Greenergy play an increasingly vital role. Trafigura views this acquisition as a significant expansion of its existing biofuels and fuel supply capabilities, positioning the company to capitalize on the growing demand for alternative energy sources.

Trafigura's foray into the biofuels sector marks a notable shift in focus from its traditional operations in crude oil and oil products. While the company transported over a million tons of biofuels in 2023, its crude oil shipments exceeded 136 million tons. Furthermore, Trafigura holds a substantial presence in the fuel retail sector through its ownership of Puma Energy, one of the largest fuel retailers in Africa and Latin America.

Trafigura is not alone in recognizing the potential of biofuels. Varo Energy, backed by Vitol Group, is also investing in a sustainable jet fuel plant in Rotterdam in partnership with Gunvor Group. This underscores the growing interest among major players in the energy industry to explore sustainable and environmentally friendly alternatives to traditional fossil fuels.

In Europe, there are regulatory obligations for nations to incorporate a certain percentage of biofuel into road fuels. This biofuel can be derived from various sources, including rapeseed oil, corn, sugar, and even waste materials such as animal fats and used cooking oil. The industry has made significant strides in recent years by shifting toward the use of waste products to mitigate concerns about the food-versus-fuel debate that plagued the early years of the biofuels industry.