SUBSCRIBER NOTE: Platts proposes to clarify CN standards for European LSFO

Platts requests feedback on the potential clarification of which European Combined Nomenclature (CN) code ought to be fully reflected in its European low sulfur fuel oil price assessment.

Platts European LSFO assessments do not currently specify a standard CN code. Buyers and sellers providing data for Platts to publish during the MOC process are expected to fulfill resulting transactions with fuel meeting specification requirements, with no expectation currently defined for a specific CN code.

CN codes, which Platts understands are designated by and subject to the approval of customs authorities within each EU member country, are an important component of settling tariffs and taxes within the EU.

Platts understands that LSFO of the identical specification may be classified using either of two, existing Combined Nomenclature (CN) codes, and that choice of code may vary between customs authorities in Europe.

Market participants have highlighted that while the fuels may be otherwise identical, the attachment of a specific CN label may significantly influence merchantability within Europe and the Mediterranean.

As a result, Platts proposes to clarify that its European and Mediterranean assessments reflect LSFO meeting Platts published specifications, and where the material has been assigned CN code 2710 1964. In all instances where a seller intends to deliver a fuel with a CN code other than 2710 1964, Platts asks that the seller specifies this CN code in the terms of any offer provided for publication.

Buyers providing bids for publication by Platts must be willing to accept fuel with the CN code 2710 1964. Platts will also publish bids in which the buyer specifies that they will also accept CN code 2707 9999. Buyers should not bid for fuel with a CN code 2707 9999 designation only, as this may be unduly restrictive in nature.

In instances where the CN code used has a material effect on LSFO value, Platts may normalize offers of fuel with CN code 2707 9999.

In CIF Mediterranean LSFO bids and offers, Platts will consider the CN classification of the material as a relevant factor in determining merchantability. Platts understands that LSFO classified as 2710 1964 is currently seen as generally merchantable in the Mediterranean market.

Platts will continue to monitor LSFO activity and flows under both of these codes.

Please send all comments to europe_products@spglobal.com and pricegroup@spglobal.com by July 5, 2017.

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.