Trafigura CEO: Clean fuels need subsidies and mandates in order to survive on the free market.

Richard Holtum, chief executive of global commodity trading house Trafigura, said that clean or low-carbon fuels need mandates and subsidies to deal with their higher costs compared to conventional fuels.

He said that the market will only work if consumers are willing to spend two or three times more on fuel than they do today.

Trafigura announced on Tuesday a six-year binding agreement with Syzygy Plasmonics to purchase SAF from Uruguay. The deal covers the entire volume Syzygy’s biogas-to SAF project, which is expected to start delivering in 2028.

Holtum said that switching from coal to gas today, in order to reduce carbon emissions, is more valuable than any potential carbon emission reductions in 'longer-term project.

He said that the carbon that you remove today is worth much more than what you will remove in ten years.

He said that any excess renewable energy should be used in electricity grids and not to produce fuels to accelerate the move away from coal.

(source: Reuters)