Xpansiv Ties ESG Data to Crude

The company, which runs a marketplace for commodities with the consideration of environmental, social, and governance (ESG) factors, will register crude produced by Lundin Energy with the help of certification company Intertek.

Oil Pipeline with Triangle Shapes Lines And Dots Forming A Plexus Background
Source: Onurdongel/Getty Images

Xpansiv recently launched Digital Crude Oil (DCO), the latest addition to its Digital Fuels Program. DCO units registered on the Xpansiv DF Registry allow markets to differentiate crude oil on the basis of greenhouse-gas emissions and environmental, social, and governance (ESG) performance.

Xpansiv runs a global marketplace for ESG-inclusive commodities in an effort to bring transparency to the trade of energy, carbon, and water in an increasingly information-rich and resource-constrained world.

“This is a critical moment of confluence between two paradigm shifts in global energy—digitization and decarbonization,” said Xpansiv CEO Joe Madden. “The energy transition will be driven by greater data transparency, so crude oil producers like Lundin Energy with improved ESG performance are rewarded with a clear price signal. The Xpansiv platform provides the financial infrastructure—from source data to market outcomes—that enables this shift in the valuation of global commodities.”

The inaugural DCOs will be registered from Lundin Energy’s North Sea production and will present carbon intensity and other key environmental attributes for individual barrels of oil.

“The time has come for a differentiated market for responsibly produced oil and gas,” said Lundin Energy CFO Teitur Poulsen. “We have already sold certified, carbon-neutrally produced crude cargoes, which indicates the demand signals are real. Certification and traceability are key to creating a credible market for responsibly produced hydrocarbons.”

Certification-company Intertek also has joined the Xpansiv’s Digital Fuels Program as a DCO-certification partner, adding another source of data-quality assurance, carbon-intensity benchmarking, and independent certifications.

Xpansiv says it created the Digital Fuels Program to support the creation, issuance, registration, management, trading, and retirement of encrypted digital twins that include the environmental attributes of fuels. The program includes a burgeoning network of energy producers, data refineries, monitoring networks, lifecycle assessments, standards and certification organizations, and downstream market participants—all operating under a governance framework that specifies data quality and management protocols, as well as full lifecycle requirements for these new digital assets.

Similar to Digital Natural Gas (DNG), DCO brings transparency and precision to measuring the ESG effects of crude-oil production based on immutable data, auditable from source to market. “Trust from all stakeholders in the sustainability journey will only happen with total transparency,” said Malissa Boudreaux, senior vice president for total energy at Intertek.

In September, Xpansiv announced the first transaction of Digital Natural Gas (DNG) through its registry. Since then, more than 2,000 methane performance certificates have been traded, with daily price assessments provided by S&P Global Platts. DNG allows downstream customers to quantify progress on methane-reduction commitments based on empirical data. Xpansive said that producers are uploading data on approximately 1 billion ft3 of natural gas to its platform each day.

“Digital Crude Oil again demonstrates how the Xpansiv platform can ingest and contextualize complex data from multiple sources according to rigorous governance rules,” said Jeff Cohen, Xpansiv’s sustainability director. “As a result, we can now differentiate raw-material inputs to global supply chains based on environmental performance innovations—information that was previously invisible to markets.”