Trading firm Trafigura makes green hydrogen investment

Market: Hydrogen, Oil products
02/12/20

Trading firm Trafigura will invest $62mn in Switzerland-based green hydrogen company H2 Energy Holding to help it with its plans to roll out a supply-chain network.

This marks a small step into the energy transition for one of the world's largest physical commodities trading groups, which will put its money into developing a business that could cut into one of its traditional markets. Trafigura will invest $20mn to support H2 Energy's development, and the rest will "seed and fund" a 50:50 joint venture, based in Zurich, that will roll out the model across Europe, excluding Switzerland.

Green hydrogen is produced from renewable energy, through electrolysis. H2 Energy is working with others to develop a hydrogen production facility, a hydrogen filling station, a hydrogen-powered truck and several hydrogen-powered cars. Trafigura trades close to 6mn b/d of oil of crude and oil products, along with metals and minerals. It has recently made investments that appear to shore up its position in the oil markets, including the acquisition of a 3pc stake in Italian refiner Saras, which owns the 300,000 b/d Sarroch refinery in Sardinia, and the purchase of a 10pc stake in Russian state-controlled Rosneft's ambitious Vostok Oil project in Russia's arctic.

Trafigura's other assets include a majority stake in global zinc and lead producer Nyrstar, a stake in global oil products storage and distribution company Puma Energy, and a stake in terminals, warehousing and logistics operator Impala Terminals.

"Our investment [in H2 Energy] has enormous potential at a time when the economics for green hydrogen use by heavy duty transport is becoming competitive with traditional fuels," Trafigura chief executive Jeremy Weir said. "We are looking forward to… bringing Trafigura's ability to evolve traditional supply chains to develop new markets."

H2 Energy chairman Rolf Huber said the joint venture with Trafigura "will enable the partners to execute on planned projects on a Europe-wide scale."

By Konstantin Rozhnov

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