Hedging Solutions
Creating hedging strategies that help mitigate energy risks that could affect the financial health of your company.
Energy Hedging Solutions
Hedging, for the most part, is a technique that is meant to reduce a potential loss – not maximize potential gains. Nevertheless, hedging often comes with clear economic advantages.
Firms that have good risk management programs can use this stability to reduce their cost of funding or lower their prices in markets deemed strategic and essential to the future progress of their companies.
Hedging can be used to improve or maintain competitiveness. Companies don’t exist in isolation; they compete with other domestic companies in their sector and globally.
GRM is active in most major energy markets globally. With the knowledge and expertise gained by serving most major commercial sectors, we can help mitigate energy price risks.
- CRUDE OIL
- JET FUEL
- GASOLINE, NAPTHA & LIGHTENDS
- DIESEL & GASOIL
- FUEL OIL
- BITUMEN
- BIOFUELS AND BIOMASS
- NATURAL GAS, LPG’S & EMISSIONS CERTIFICATES
Emissions Certificates, LNG, and Natural Gas
The natural gas market comprises over 25% of the total European energy usage, and this share will only grow in the coming years. Because many view natural gases as a transition fuel to eventual genuinely sustainable solutions, the use of natural gas in all its forms will increase significantly. Most participants in this market will require price risk management of their gas price exposures.
Emissions certificates are a part of the solution – and a necessary tool in the hedging arsenal – as users of fossil fuels look at these markets as ways to reduce their carbon footprints. GRM is an active participant in all these markets.
GRM TRADES MANY GLOBAL NATURAL GAS MARKETS AND CAN HELP LOCK IN POSITIVE ARBITRAGE ECONOMICS FOR SHIPPERS OF LNG
Liquefied natural gas is natural gas cooled to about minus 160°C. In its liquid form, LNG is transported around the world to LNG receiving terminals. Its price depends on the price of natural gas in both the terminal market and at the point of liquefaction.
EMISSION CERTIFICATES ARE ALLOWANCES TO EMIT ONE TONNE OF CARBON DIOXIDE EQUIVALENT DURING A SPECIFIC PERIOD.
The certificate is traded on the EU Emissions Trading System where the total amount of CO2 that the system can emit is not only capped, but reduced by 2% every year.
Within this cap, companies can buy and sell emissions certificates. Companies that reduce more than the 2% required can sell their reductions to the market, and companies who need more can buy them.
We are a liquidity provider through our market access and can quote on the spot or forward maturities. In addition, we help clients reach their compliance obligations through the buying and selling of certificates.
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