Commodities Trader Trafigura to Grow Biodiesel, Fuel Retail With Greenergy Deal

(Bloomberg) -- Commodity trading house Trafigura Group agreed to buy the European business of biodiesel producer and fuel supplier Greenergy from Brookfield Asset Management.

The world’s biggest commodity traders are funneling bumper profits from recent volatility in energy markets into assets that may benefit from a Western transition away from fossil fuels. They are also expanding their conventional energy distribution assets such as storage terminals, refineries and fuel stations. 

Trafigura didn’t announce terms of the deal in a statement on Monday. Greenergy has biofuel production plants in the UK’s Teesside and Immingham, as well as Amsterdam in The Netherlands. It also runs a major wholesale road-fuel distribution business, supplying 14 billion liters (3.7 billion gallons) last year to independent retailers and supermarket chains.

“As Europe transitions to a lower-carbon future and the refining industry adapts to changing market dynamics, companies like Greenergy become increasingly important,” Ben Luckock, global head of oil at Trafigura, said in the statement. “This acquisition represents a major expansion of our existing biofuels and fuel supply capabilities.”

Trafigura is growing its biofuels business from a low base relative to its massive operations in crude and oil products. The Geneva-headquartered company moved a million tons of biofuels in 2023 compared with more than 136 million tons of crude. It also owns Puma Energy, one of the biggest fuel retailers in Africa and Latin America.

It’s not the only trader looking closely at biofuels - Vitol Group-backed Varo Energy is investing in a sustainable jet fuel plant in Rotterdam in conjunction with Gunvor Group.

European nations are obliged to add a certain amount of biofuel into road fuels, made from everything from rapeseed oil to corn and sugar. The industry has advanced in recent years toward using waste like animal fats and used cooking oil in a bid to avoid a repeat of the food-versus-fuel backlash that tainted the industry in its early years.

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