The big carbon short
Commodity traders will help solve a forthcoming large carbon short in the voluntary offset market
Physical commodity traders love a short position. It allows them to try and source a commodity for delivery at a lesser price than where the short was initially indexed—in the worst case, they match their derivatives hedges and physical contract to the same index and close out their positions at breakeven. Traders prefer commodity shorts to longs because they can maximise their trading skills, market knowledge, and contacts across the whole market as they try to find the cheapest-to-deliver commodity. They review transport costs, financing and contract specifications when attempting to meet their obligations. It is detailed market and product knowledge that enables them to succeed. The likel

Also in this section
19 May 2025
The two Gulf states are combining fossil fuel production with ambitions to become leaders in low-carbon energy
14 May 2025
Deal with Calpine shows oil and gas major ExxonMobil has no intention of curbing its CCS ambitions, despite US policy risks and broader scepticism over the energy transition
13 May 2025
Volatile tariffs add new risks for a sector already struggling to achieve economies of scale
30 April 2025
State administrations are using a flawed metric to justify green energy projects