SUBSCRIBER NOTE: EU biofuel GHG saving minimum compliance from 2017

The Renewable Energy Directive (RED) that underpins biofuel mandates in European Union member states, requires that starting January 1, 2017 the minimum greenhouse gas savings (GHG) achieved by RED-compliant biofuels increases to 50%, from the current 35%.

Currently Platts T2 and T1 ethanol price assessments (see below detailed list) reflect product fully compliant with the RED. All material traded within the MOC window process is also RED compliant. By way of clarification and to maintain compliance, Platts assessments and price discovery processes would automatically shift to reflect product with minimum 50% GHG savings without any changes to methodology, when the new minimum standard is implemented.

However, in order to mitigate risk related to any delay in implementation of the new requirement at either EU or member state level, Platts is considering introducing a minimum 50% GHG saving requirement for T2 and T1 assessments and MOC processes, to reflect market standards. This would operate in addition to the prevailing RED requirement, with the highest requirement for GHG savings taking precedence.

Platts invites feedback and data for the current and likely GHG savings achieved by ethanol traded within the ARA region both currently and also potentially from 2017 onwards. The aim of implementing such a change to methodology is to minimize the risk that market participants receive material within the MOC process which is non-compliant at time of delivery. As such, any change would need to be implemented effective within December 2016.

Platts editors will be actively seeking this feedback from market participants in the coming weeks. Feedback, comments and questions may also be sent to europe_ags@spglobal.com with a CC to pricegroup@spglobal.com.

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.

Affected assessents would include:

Description Symbol Ethanol T2 FOB Rdam Barge Eur/cm AAYDT00 Ethanol T2 FOB Rdam Barge German Spec Eur/cm AAVLD00 Ethanol T2 FOB Rdam Barge $/cm AAYDT10 Ethanol T2 FOB Rdam Barge German Spec $/cm AAVLD10 Ethanol T1 CIF NWE Cargo $/cm AAYDS00