A carbon-linked trade finance framework: A multidimensional shadow-pricing model for decarbonising the fertiliser supply chain

Fertiliser traders face converging pressure from border carbon adjustment regulation and the decarbonisation of maritime logistics, yet the price of their trade finance rarely reflects supply-chain carbon intensity. This paper develops a multidimensional shadow pricing model that links the cost of trade finance to verified emissions for an anonymised fertiliser trader. Using the firm's operational shipment records, verified border-adjustment emissions data, maritime emission factors and questionnaire evidence from two banks, the study quantifies logistics emissions across eight shipping corridors, product-level border-adjustment liability to 2034, and the financing consequences of a tiered sustainability-linked structure. In the case studied, avoided border-adjustment cost from shifting to lower-carbon suppliers greatly exceeds the financing margin differential; the participating banks preferred verified over narrative disclosures; and data collection and bank engagement appear best pursued together, not sequentially. The framework may be adaptable, subject to further validation, to other commodity traders with border carbon exposure.