Green Shadows
Every green supply chain casts a cheaper, darker shadow.
Welcome back to The Ledger - a weekly briefing of what’s happening inside complex systems around industrial decarbonisation. Welcome to Issue #17.
THE OPENING ENTRY
€1,240 per tonne.
€780 per tonne.
Same steel.
A trader in Rotterdam explains:
Contract A: hydrogen-reduced steel, headed to Volkswagen.
Contract B: blast-furnace steel, headed to Vietnam.
Identical molecules.
A 37% price gap.
“VW’s procurement creates the discount,” he says. “When they buy green, someone else gets the brown cheaper.”
This is the new geometry of global industry.
Every green purchase creates a shadow purchase.
Every sustainability commitment creates its unsustainable twin.
The green economy doesn’t replace the brown economy.
It produces its shadow - bigger, cheaper, and growing faster.
FIELD REPORTS
1. The Aluminium Apartheid
One smelter in Scotland. Two realities.
Line A: hydro-powered, 4 tCO₂/t, sold to Apple and BMW at a premium.
Line B: grid-powered, 12 tCO₂/t, sold everywhere else at discount.
Green premium: +22%
Shadow discount: –15%
Apple’s Scope 3 shrinks by 8 tonnes.
A Vietnamese window manufacturer increases theirs by… nothing.
They don’t measure Scope 3.
Global emissions: unchanged.
Price distortion: structural.
2. The Chemical Cascade
Antwerp. Same ethylene oxide. Two prices.
Certified green: +30%
Uncertified: shipped to South Asia at volume discounts.
“We’re not reducing emissions,” the logistics manager says. “We’re subsidising unregulated growth with our premium-driven leftovers.”
Europe buys certificates.
Emerging markets buy molecules.
3. The Cement Segmentation
Northern France. Same kiln, same limestone.
Low-carbon cement: €140/tonne
Traditional cement: €95/tonne
“We just allocate renewable energy credits to the premium batches,” the plant manager says.
The accounting evolves. The chemistry doesn’t.
CrossRail gets the narrative.
Balkan construction gets the shadow.
Planetary outcome: identical.
4. The Shipping Shell Game
Singapore. Biofuel blends support “green shipping.”
One vessel burns a biofuel mix.
Green credits are allocated to green-paying containers.
Fossil allocations go to everyone else.
Green rate: $400/TEU
Standard: $280/TEU
The more companies pay for green shipping, the cheaper dirty shipping gets.
Displacement as a service.
5. The Plastic Paradox
Saudi Arabia. Polymer producers see demand diverging at speed.
Europe wants recycled and certified material at premium.
Asia and Africa want virgin resin at widening discounts.
The spread:
2020: 8%
2023: 19%
2025: 34%
“We’re not reducing plastic,” the commercial director says. “We’re relocating it.”
THE SHADOW MECHANICS
The pattern is universal:
A buyer demands green inputs
Producers segment inventory
Premium volumes shrink supply
Non-green surpluses grow
Prices fall in price-sensitive markets
Brown consumption accelerates
Every green transaction creates a shadow transaction.
The ratio is consistent globally:
For every €1 of green premium paid, €2 of shadow discount is created.
The displacement multiplier: 2:1.
As one FTSE100 procurement head told me:
“Green buying reduces our footprint. It expands someone else’s.”
THE ARBITRAGE ECONOMY
Traders are making a fortune on the spread.
“I buy dirty steel in Rotterdam, ship to Lagos, make 30% margin,” one tells me. “ESG created the best arbitrage market in decades.”
The spreads:
Carbon-intensive aluminium: 40% cheaper in Asia
High-sulphur diesel: 45% cheaper in Africa
Virgin plastics: 50% cheaper in unregulated markets
Green generates headlines.
Brown generates returns.
THE MEASUREMENT MIRAGE
Corporate sustainability reports look triumphant:
“–50% supply-chain emissions”
“100% renewable inputs”
“Net-zero value chain achieved”
Global data does not:
Industrial emissions: flat
Brown-product volumes: rising
Shadow-market prices: collapsing
Companies measure the light.
The atmosphere absorbs the shadow.
“We’ve redistributed emissions to entities that don’t report,” an ESG consultant admits.
THE VELOCITY DIFFERENTIAL
Green markets grow slowly.
Shadow markets grow explosively.
Because:
+10% green premium → –5% demand in wealthy markets
–10% shadow discount → +20% demand in emerging markets
Elasticity amplifies displacement.
A development bank economist put it plainly:
“We’re not decarbonising. We’re redistributing affordability.”
THE REGULATORY RATCHET
Europe tightens standards.
Green prices rise.
Shadows deepen.
Imports surge.
Europe tightens further.
Carbon border adjustments shift shadows.
They do not eliminate them.
“Regulation without global alignment is arbitrage theory,” one policy advisor says.
THE OPERATOR’S PLAYBOOK
For procurement leaders:
Track the shadows your buying creates
Measure both sides of the ledger
Pressure suppliers on spread reduction, not just certificates
Report displacement, not just reduction
For producers:
Two-tier markets are here to stay
Price discrimination is the business model
Build green capacity and shadow capacity
Your margins will sit in the spread
For policymakers:
Treat shadows as primary effects, not externalities
Coordinate globally or accept divergence
Measure displacement — that’s the real carbon metric
Regulate spread, not just premium
THE LEDGER LINE
Every green supply chain casts a shadow.
The cleaner the front stage becomes, the darker - and cheaper - the backstage gets.
We have built a world where:
Green steel costs €1,240.
Brown steel costs €780.
Same atoms.
Different stories.
Same atmosphere.
The green economy isn’t replacing the brown economy.
It is shadow-funding it.
Every sustainable purchase somewhere makes unsustainable consumption cheaper somewhere else.
Every corporate commitment brightens one side of the ledger and deepens the darkness on the other.
The planet prices carbon one way.
The market prices it two ways.
The difference is profit.
The difference is the problem.
The difference is permanent.
Thanks for reading, and please share The Ledger if you have found it useful or insightful in any way.
Here’s to what’s possible
Dom