Origin of biofuels: the new hot job on the margins of finance

Daniel Koh had no intention of working with biofuels. That’s how it happened. As a student at Singapore Management University, Koh says he applied for 40 jobs in banking and just one in commodities trading. He got the job as a commodity trader and his career took a turn in a totally unexpected direction.

“Working in commodities has completely changed my outlook on life,” says Koh. “Commodities are linked to everything from geopolitics to agriculture, climate and politics.”

After joining the Trader Development Program at BP in 2012, Kohn moved to the origin of biofuels in 2018. Unlike fossil fuels, biofuels are anything produced by contemporary plants, he explains. They include ethanol, tallow, palm waste or biodiesel made from used cooking oil. As a biofuels originator, Koh is all about the supply chain: he sources biofuels for BP and helps transport them around the world.

“I help grow our business,” says Koh. “My job is to go out there, build relationships and talk to suppliers about why it’s best to work with bp. I am responsible for sourcing cargo and delivering it to our processing sites. I build and optimize our biofuel supply chain.

Suppliers Koh speaks to include people who collect used cooking oil from restaurants in Singapore. “They are actively talking to restaurants and collecting the oil,” he says. “I talk to them to understand the supply and to make sure they get good quality oil from sustainable sources. I also talk with my clients to understand their needs and requests.

Commodity trading and origination involves dealing with physical products, Koh explains. “We could buy a huge shipment of used cooking oil, find a ship for it, find a plant that can make biodiesel out of it, and then take it to a market like Europe where there’s more incentive to use it.”

As a student, Koh says he was interested in macroeconomics and considered becoming a macro trader. In fact, he says that feedstocks are more interesting because they are all-encompassing and that biofuels in particular are interesting within feedstocks because they are at the forefront of the energy transition. “Biofuels save 80% on the use of fossil fuels,” he says.

As an initiator, Koh says his work is much more people-oriented than traders who focus primarily on numbers.

“Every day, I am there, I talk to my contacts and I find out what people are doing in the markets. I typically have 5-6 conversations over coffee a day (and at the end of the day, I’m usually shaking from too much caffeine!). You have to like meeting people.

People who work in biofuels need to be interested in geopolitics and contemporary events and understand global dynamics, Koh says. This is more important than a detailed understanding of science and technology. “Macro trading can be very politically driven, but here we are looking at more than financial policy. It’s weather, agriculture and human nature in terms of when farmers sow crops – it’s very much tied to everyday life. This is an opportunity to work in commodities, but with a broader mission.

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