Reporting and opinion by Mathew Carr (not sponsored, interesting content that I noticed)
Want to deal properly with commodities risks?
Then you need to plot market-price and global trading and shipping scenarios that include the price of EU carbon allowances as well as carbon credits, says Alfredo Nicastro, Global Head of Carbon Markets, StoneX.
Europe’s carbon border adjustment mechanism (CBAM) program is embedding carbon costs, production GHG efficiency and shipping GHG efficiency into every delivery, Nicastro says (see video below).
Buyers of commodities and carbon-intensive imports are already favoring carbon-efficient suppliers as well as those with strong carbon-supply-chain data, he says.
Commodities traders with carbon expertise/carbon modelling will win in the markets, he said.
Losers ignore climate costs.
It’s worth listening to this whole “interview” / promotional video.
Key Themes from the Discussion
- Carbon intensity is now a pricing input alongside freight and quality.
- Variable carbon costs can erase margins if not priced at origin.
- Emissions transparency is reshaping sourcing and trade flows.
Unedited:
Carbon Risk Is Now Embedded in Commodity Pricing
By: StoneX Media, StoneX Media Yesterday, 10:26 PM
As of early 2026, carbon costs are no longer abstract or deferred considerations in commodity trading. Regulatory mechanisms such as carbon border measures and shipping emissions schemes are embedding emissions intensity directly into landed costs. This means two cargoes of the same commodity can carry materially different economics depending on how and where they were produced and transported. These insights are drawn directly from a primary-source interview examining how carbon regulation is reshaping trade mechanics.
Alfredo Nicastro, Senior Vice President and Global Head of Carbon Markets at StoneX, has spent years advising market participants on the intersection of carbon regulation and physical commodities. His experience across compliance markets and commercial trading gives him a front-line view of how carbon risk is migrating from the regulatory perimeter into day-to-day pricing decisions.
Key Themes from the Discussion
- Carbon intensity is now a pricing input alongside freight and quality.
- Variable carbon costs can erase margins if not priced at origin.
- Emissions transparency is reshaping sourcing and trade flows.
Watch the Full Conversation
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Carbon Costs Are Now Priced Like Freight and Quality
Carbon risk has become a direct pricing variable rather than a downstream compliance cost. Nicastro explains that carbon regulation now behaves “very much like a traditional tariff” because it raises the landed cost of carbon-intensive commodities. Crucially, he notes that “two cargoes of the same commodity can have very different economics”depending on emissions intensity. As a result, traders must price carbon at origin or risk seeing arbitrage opportunities disappear once products cross regulatory borders.
Carbon Risk Management Is Becoming a Commercial Discipline
Managing carbon exposure is increasingly central to protecting trading margins. Nicastro stresses that traders should treat carbon as a “core commercial risk”, integrating it into pricing models, stress testing, and contract design. He highlights the growing use of carbon price hedging and the prioritisation of suppliers with reliable emissions data. Consequently, firms that embed carbon intelligence into trading decisions are better positioned to preserve margins and create competitive advantage as regulation expands.
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— Written by Lindo Xulu, StoneX TV Journalist
— Expert: Alfredo Nicastro, Global Head of Carbon Markets, StoneX