Platts maintains Aframax UKC-UKC assessments exclusive of EU ETS carbon offset costs

Platts, part of S&P Global Commodity Insights, maintains its dirty Aframax UK Continent-UK Continent assessments exclusive of EU Emissions Trading System (EU ETS) carbon offsetting costs.

This follows immediate market feedback to a Feb. 1 proposal to include carbon offsetting costs in its dirty Aframax 80,000 mt UKC-UKC Worldscale [PFAKD10] and $/mt [TDACD00] assessments from May 1, 2024. The proposal note can be found here, with the decision note published here.

This means the 10-day rolling average of the Aframax 80,000 mt UKC-UKC assessment [TDUUW00] -- which is used in the calculation of the six Freight Adjustment Factors that are used in Dated Brent to netback CIF Rotterdam indications to FOB North Sea equivalent values -- continues to be assessed exclusive of EU ETS carbon offset costs.

Platts also publishes a carbon-accounted spot freight rate for the Cross-UKC 80,000 mt Aframax route [ANEUH00], but this does not currently play any role in the Dated Brent assessment.

While a large number of fixtures reported to Platts in EU load/delivery ports are now inclusive of carbon offset costs, market feedback remains mixed on how oil and shipping companies will ultimately account for the extra costs under the EU ETS. Fixtures/market indications inclusive of carbon costs are normalized to carbon-exclusive levels in the assessments.

Platts continues to publish any bids, offers, trades or indicative market values both inclusive and exclusive of EU ETS carbon offset costs as those become available.

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