Platts proposes including EU ETS carbon costs in tanker freight assessments; launching parallel carbon-exclusive rates for two benchmark routes effective Jan. 2, 2025

Platts, part of S&P Global Commodity Insights, proposes to include the European Union’s Emissions Trading System (EU ETS) carbon costs in its global clean and dirty tanker freight assessments to reflect prevailing tanker spot trade, with effect from Jan. 2, 2025.

Following Worldscale Association’s notice on Sept. 6, 2024, and its earlier notice from July 8, 2024, Platts further proposes to launch parallel carbon-exclusive rates for two of its benchmark routes. This is in light of market feedback regarding open interest in respective Platts benchmark-settled derivative contracts.

As the freight market has demonstrated a broad adoption of carbon-inclusive trading, Platts proposes the following:

• Platts proposes to amend the methodology of all its existing global clean and dirty tanker freight assessments from carbon-exclusive to carbon-inclusive, reflecting spot fixtures, bids and offers inclusive of EU ETS costs.
• In addition, Platts proposes to launch carbon-exclusive assessments under new symbol codes for the below-stated two benchmark assessments, enabling the prevailing open interest on the said routes to be settled at a carbon-exclusive price.

The following routes would be assessed on a carbon-inclusive basis under the prevailing codes in addition to a carbon-exclusive assessment published under a new symbol code.

• Aframax 70,000 mt USGC-UKC Worldscale (TDUCG00) and $/mt (TDUCF00)
• Aframax 80,000 mt UKC-UKC Worldscale (PFAKD10) and $/mt (TDACD00)

This proposal follows a consultation published Aug. 1 Platts consults market on impact of EU ETS inclusion in shipping, oil benchmarks | S&P Global Commodity Insights (spglobal.com) after Worldscale Association's initial notice on July 8, 2024, that it will include European Union Emission Trading System (EU ETS) carbon costs in its flat rates for 2025.

Impact on Platts Dated Brent

The 10-day rolling average of the Aframax 80 kt UKC-UKC assessment(TDUUW00) is used in the calculation of the six Freight Adjustment Factors that are used in Platts Dated Brent to netback CIF Rotterdam indications to FOB North Sea equivalent values. The spot assessment (PFAKD10) is also referenced in section 6.3 of the Stasco BFOETM 2022v1.2 General Terms and Conditions. As described above, these assessments would be carbon-inclusive from Jan. 2, 2025 under this proposal.

Please send all feedback and comments by Sept. 30 to tankers@spglobal.com, pricegroup@spglobal.com , Europe_products@spglobal.com and Europe_crude@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.