Biofuels Broker SCB Eyes More Data Partnerships in 2020

Biofuels and renewable energy broker SCB Group is planning to expand the number of vendors that carry its data this year, in response to growing demand for renewables data. During 2019, the Nyon, Switzerland-based firm set up a formal market data sales business and built an initial cadre of redistributors.

SCB has had a redistribution deal in place with interdealer broker TP Icap’s data arm since 2014, whereby TPI carries price data generated by SCB’s brokerage operations. The deal covers a broad range of contracts within the markets of biofuels and biomass, agricultural products and feedstocks, and energy, along with a range of other commodities, including glycerine and tallow.

Since then, the broker has struck deals with Bloomberg, Chicago-based research and data provider Morningstar, and Chicago-based data and analytics provider Barchart. SCB is currently in talks with Refinitiv, UK-based commodities and energy data provider DataGenic, and ZE PowerGroup, which operates the Zema data analytics and integration platform.

Catherine Chen, business manager for market data at SCB, says she expects these new deals to be signed by the end of Q1 this year, reflecting increased demand for renewables data from data distributors.

“We’re number one in all the markets that we broker,” Chen says—a claim supported by the firm winning the biofuels broker category in the Risk & Energy Risk Commodity Rankings (run by WatersTechnology stablemate Risk.net) for the past seven years in a row. Traders, analysts and risk managers use SCB’s data, while firms also use it as a benchmark to price their books.

Other drivers for the new deals include demand from clients for the broker’s data to be available via a specific vendor’s platform, and SCB’s own desire to broaden the distribution and consumption of its data in response to growing interest in renewables trading. The reason for this demand has largely been driven by regulations such as Europe’s Renewable Energy Directive II, and countries’ own mandates to cut greenhouse gas emissions, as well as government incentives such as the US Biodiesel Tax Credit, and increased investor awareness of ESG (environmental, social and governance) investments.

It was this desire to expand its data distribution that led the broker to create a dedicated market data team last year, says Chen, who joined the company as part of this initiative. The team now numbers around a dozen staff overall, with one dedicated data professional for each broking desk producing end-of-day assessments from the data generated by that desk, plus another three IT staff dedicated to market data-related functions.

Before striking relationships with third parties, SCB’s brokers would capture and distribute price data by themselves, to provide clients with a view of the market. Now, the data team properly aggregates and cleanses data generated by its broking desks to ensure the content is accurate and reliable. From there SCB makes it available via its vendor partners and as spreadsheets that clients can download directly from its website.

Because the markets are not as liquid and fast-moving as other commodities or financial markets, SCB does not distribute real-time prices, but instead delivers end-of-day or morning price assessments, depending on each client’s preference—though the broker is also planning to begin offering midday assessments at some point in the future, depending on client demand.