Trafigura CEO Jeremy Weir calls out market fragmentation as biggest challenge facing energy transition

1. Fragmented supply chains (and regulations)

“The fragmentation that we see in certain marketplaces is inflationary because the cost of moving the material is becoming more expensive. It’s not as streamlined as it used to be,” Weir says.

Weir underscores the time, effort and capital required to adapt to changing trade dynamics, urging regulators and governments to appreciate the interconnectedness of global markets.

2. Fragmented carbon markets

“We’re not going to get any green premiums until we have actually a defined carbon price,” Weir says.
Addressing the fragmented nature of global carbon markets, Weir stresses the need to establish consistent carbon pricing. This, he argues, is crucial in the drive to develop green premiums and facilitate sustainable practices. But he isn’t optimistic: “We haven’t got a consistent carbon price around the world. And, quite frankly, I think it’s going to be very, very difficult to get there.”

3. Global infrastructure not fit for purpose

Weir predicts that a lack of sustainable power infrastructure and the energy storage systems it relies on will hold back the energy transition. The availability of raw materials, technology and capital will cause the transition to “go in fits and starts” and prolong the world’s reliance on fossil fuels.