17 May 2024 | 11:26 UTC

Platts proposes to expand European low-carbon, zero-carbon aluminum assessments

Platts, part of S&P Global Commodity Insights, is proposing to expand its daily European low-carbon (LCAP) and zero-carbon (ZCAP) assessments for primary aluminum, effective July 1.

Under this proposal, Platts would introduce further granularity to its LCAP and ZCAP assessments by publishing a low-carbon and zero-carbon premium over P1020 material to separately differentiate any carbon-related "upcharge" being achieved.

The new assessments would complement Platts' existing LCAP and ZCAP prices first launched in April 2021, which capture the total premium for low-carbon or zero-carbon P1020, incorporating the underlying premium for carbon-unaccounted P1020, over the prevailing London Metal Exchange cash settlement.

Platts would also rename its existing LCAP and ZCAP assessments for greater clarity to help market participants differentiate the new low-carbon and zero-carbon "premium" over P1020 from the existing low-carbon and zero-carbon 'price', which incorporates the P1020 premium.

The proposed enlarged suite of daily assessments would be as follows:

Existing daily assessments Proposed new daily assessments Proposed renaming of existing daily assessments
Aluminum duty paid in-warehouse Rotterdam premium (AALVE00) +

Low-carbon aluminum premium (LCAP), duty paid in-warehouse Rotterdam

 =

Low-carbon aluminum price, duty paid in-warehouse Rotterdam (LALVE00)

Aluminum duty unpaid in-warehouse Rotterdam premium

(AALVI00)

 + Low-carbon aluminum premium (LCAP), duty unpaid in-warehouse Rotterdam =

Low-carbon aluminum price, duty unpaid in-warehouse Rotterdam (LALVI00)
Aluminum duty paid in-warehouse Rotterdam premium (AALVE00) +

Zero-carbon aluminum premium (ZCAP), duty paid in-warehouse Rotterdam*

 =

Zero-carbon aluminum price, duty paid in-warehouse Rotterdam (ZALVE00)*

Aluminum duty unpaid in-warehouse Rotterdam premium

(AALVI00)

 +

Zero-carbon aluminum premium (ZCAP), duty unpaid in-warehouse Rotterdam*

 =

Zero-carbon aluminum price, duty unpaid in-warehouse Rotterdam (ZALVI00)*
*calculated using Platts CORSIA-eligible carbon credit price assessments (CEC)

In addition, Platts proposes to calculate historic data for the new assessments based on respective LCAP/ZCAP and P1020 assessment history, as well as the related weekly, monthly and yearly averages. Price history would be backfilled to April 6, 2021.

Platts low-carbon aluminum assessments reflect the premium or discount over LME cash for primary aluminum produced with a maximum emissions level of 4 mt of CO2 equivalent per mt of aluminum, based on Scopes 1, 2 at the smelter.

Platts zero-carbon aluminum assessments reflect a daily calculation of the premium or discount over LME cash for primary aluminum, with the cost of offsetting the carbon emissions of the Low-carbon Aluminum in-warehouse Rotterdam price assessments to zero, based on the value of the daily Platts CORSIA-eligible carbon credit price assessment (CEC), measured in US dollars per mt CO2-equivalent ($/mtCO2e).

Full aluminum specifications can be found in the Global Nonferrous Metals specifications guide here: https://www.spglobal.com/commodityinsights/PlattsContent/_assets/_files/en/our-methodology/methodology-specifications/global_nonferrous.pdf

Platts IW Rotterdam aluminum premium assessments are published in Platts Metals Daily, on pages PMA421 and MTL421, with the associated monthly averages published on PMA0650 and MTL0650 of Platts Metals Alert and Platts Nonferrous Metals Alert, in the Platts Market Center, Platts Connect and in the Platts price database.

Platts invites feedback on this proposal to EMEAMetalsTeam@spglobal.com and pricegroup@spglobal.com by May 31, 2024.

For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing.

Platts will consider all comments received and will make comments not marked as confidential available upon request.