Platts proposes to launch carbon-accounted USGC-UKC/Med Aframax tanker assessments Nov. 1

Platts, part of S&P Global Commodity Insights, proposes to launch daily carbon-accounted Aframax dirty tanker freight assessments on the US Gulf Coast-to-UK Continent/Mediterranean routes, effective Nov. 1, 2022 to provide further transparency into this developing market.

These new assessments would reflect the cost to move crude oil or fuel oil on an Aframax tanker on each route, including the additional cost required to offset 100% of the carbon dioxide emissions created through the combustion and exhaust of a ship's bunker fuel through the EU's Emissions Trading System (ETS).

The proposed assessments would add to the four European carbon-accounted Aframax tanker assessments Platts launched Aug. 1, detailed here. They would also add to the suite of freight carbon intensity values and freight carbon intensity premiums Platts has already been publishing since October 2021, which measure the impact of greenhouse gas emissions to transport various crude grades from production storage terminals to typical refinery locations around the world.

Last July, the European Commission proposed adding shipping to the EU Emissions Trading System gradually from 2023 to 2026, when shipowners would need to buy permits covering all their emissions inside the EU and 50% of their emissions from international voyages beginning and ending in the EU.

The Environmental Committee of the European Parliament voted in May 2022 to delay the inclusion of the shipping sector into the EU ETS from 2023 to 2024, but require that 100% of emissions from intra-EU voyages be covered from the outset, dropping previous plans for a phase-in period between 2023-2026. The latest EU proposals will look to cover 50% of emissions for voyages into and out of the European Economic Area until 2027, and 100% of emissions of these voyages from January 1, 2027.

The vessel speed and bunker fuel consumption used in the calculations of the proposed carbon-accounted freight assessments were arrived at by extensive market survey and reflect market practice. The proposed assessments would be published in Worldscale points and in US dollars/mt.

The calculations would use the daily EU Emission Allowance Nearest-December price (EADLP00) as published by Platts. The tank-to-wake carbon emissions based on the fuel consumption would be calculated using the carbon conversion factors published in Annex 1 of Regulation (EU) 2015/757 of the European Parliament and of the Council on the monitoring, reporting and verification of carbon dioxide emissions from maritime transport.

These carbon conversion factors, published by Platts since Aug. 1, are:

Platts publishes the values as defined in the relevant European legislation and will reflect any updates accordingly.

Please send any feedback, comments or questions by Sept. 23, 2022 to shipping@spglobal.com and pricegroup@spglobal.com.

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