Platts opens consultation on reference standards for Voluntary Carbon Credit assessments

Platts, part of S&P Global Commodity Insights, is opening a consultation on whether it should include reference bases for its Voluntary Carbon Credit assessments to provide a consistent core standard and better reflect the changing dynamics of the market.

Currently, the Platts Voluntary Carbon Credit assessment methodology reflects the most competitively priced and internationally fungible credits within a specific market category. Platts may normalize bids, offers and trades based on the technology, standard-certification, geography and co-benefits which may impact a specific project's adherence to the principles of the voluntary carbon market including, but not limited to, additionality, no overestimation, and permanence. Normalization brings the value of non-standard market information in line with the value of the most competitively priced and internationally fungible credits.

However, as the Voluntary Carbon market has continued to evolve, feedback from market participants has indicated that defining reference bases for Platts spot market Voluntary Carbon Credit assessments would provide more clarity, consistency and pricing transparency. A reference basis for a given assessment would serve as the new baseline to which non-standard market information was normalized.

Platts is specifically consulting on whether and how to define the reference basis for each of its seven carbon credit assessments, as well as how these could be maintained over time:

• Platts Renewable Energy
• Platts Methane Collection
• Platts Nature-Based Avoidance
• Platts Household Devices
• Platts Industrial Pollutants
• Platts Natural Carbon Capture
• Platts Tech Carbon Capture

Additionally, Platts acknowledges that the attributes that drive differentiation between carbon credits within the same category vary between credit types. For example, variation in the Household Devices market is heavily driven by the geographical location of a specific project, while pricing variation in the Renewable Energy market is driven primarily by technology differences. In the Nature-based avoidance assessment, the reference may be given by a selected pool of carbon projects.

In all cases, if Platts decides to implement this change it will give ample notice of the change and will clearly state the reference set of credits ahead of implementation.

Platts invites feedback on whether to define reference sets of credits for the above assessments, which specific credits to include, and when to implement such changes, as well as how to review and amend these sets over time.

Please send any feedback to Platts_Carbon@spglobal.com and pricegroup@spglobal.com by March 31, 2023. For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing.