On Tuesday, Gunvor Group–one of the world’s largest independent physical commodities traders as well as a strategic investor in global logistics and infrastructure–publicly committed to a 40 percent reduction in its Scope 1 (direct) and Scope 2 (indirect) carbon emissions by 2025, and announced the formation of a new subsidiary (Nyera) to explore renewable energy investments.
In a statement coinciding with the release of its official Sustainability Commitments publication, Gunvor acknowledged that its industrial activities–specifically its European oil refineries–and its shipping fleet (both owned and chartered) are the areas most responsible for its current greenhouse gas emissions levels. Gunvor has committed to taking significant steps to reduce and/or compensate scope 1 and 2 emissions by 35 percent and 95 percent, respectively, by 2025.
Gunvor has committed to improving the environmental impact of its current trading portfolio as well as investing in new sustainable commodities and businesses, taking concrete steps to manage, limit, and eliminate emissions wherever possible, given the role of hydrocarbons in the current global energy mix. Additionally, as new and more environmentally sustainable commodities become commercially viable and grow market share, Gunvor has committed to helping ensure the safe and efficient movement of these commodities in the interest of market balance.
As part of its lower-emission targets, Gunvor announced the launch of a new investment vehicle, Nyera (Swedish for “New Era,”, to formalize nonhydrocarbon investments comprising a minimum of 10 percent of net equity that, with leverage, should amount to a commitment of at least $500 million. Nyera’s investment focus will include carbon capture and storage, renewable fuels, renewable power, and alternative fuels, including ammonia and hydrogen.
Meanwhile, within Gunvor Group, the company says that all of its major credit lines will continue to embed specific sustainability-linked goals with linked KPIs. For existing and new trading, dedicated programs will be established to reduce emissions and environmental impact, while taking into account human rights considerations, in line with our commitment to the UNGPs on Business & Human Rights. Emissions from refineries will continue to decrease (based upon 2019 levels), through efficiency projects and a switch to renewable and carbon neutral electricity.
Gunvor has committed to converting 100 percent of its owned ships and 75 percent of its time charter shipping fleet to “eco-vessels” by 2022, and achieving 100 percent eco-vessel conversion before 2027.
Finally, Gunvor Group is in the process of finalizing its assessment of Scope 3 (value chain) emissions, including those linked to the traded commodities and voyage charters; the company commits to follow the IMO improvement in efficiency targets of 40 percent by 2030, as per Gunvor’s membership in the Sea Cargo Charter.
While Gunvor has historically focused on the safe and efficient movement of crude oil and oil products, the company has been diversifying into new commodities and strategies in response to shifting markets and opportunities throughout the past decade. Today, about 50 percent of Gunvor Group’s trading consists of “transitional” commodities, based on the EU Taxonomy, which includes biofuels, natural gas, and liquefied natural gas (LNG). The company has discontinued trading in physical coal, and in December 2020, launched a borrowing base for biofuels plants. Gunvor was the first physical energy trader to launch sustainability-linked financing, directly tying its performance in 15 different ESG criteria (including emissions reduction) to the interest rate of a facility.
