Platts to include 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, will include European Union Emissions Trading System (EU ETS) carbon costs in all global clean and dirty tanker freight assessments involving an EU port to reflect prevailing tanker spot trade. The change will go into effect Jan. 2, 2025.

Following the Worldscale Association's Sept. 6, 2024 notice and its earlier notice from July 8, 2024, Platts will also launch parallel carbon-exclusive rates for two of its benchmark routes 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 will proceed with the following:

Platts will 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 will launch carbon-exclusive assessments under new symbol codes for the below-stated benchmark assessments, enabling prevailing open interest on the routes to be settled at a carbon-exclusive price:

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

The following routes will be assessed on a carbon-inclusive basis in both Worldscale points and $/mt under the prevailing codes, in addition to a carbon-exclusive assessment in $/mt published under a new symbol code for each.

The two carbon-exclusive assessments will be arrived by deducting Platts Carbon Emission Charges(opens in a new tab), as per the phase-in schedule described in the Directive 2023/959 of the European Parliament and of the Council, from the spot carbon-inclusive freight on the said routes.

This decision follows a consultation published Aug. 1(opens in a new tab) after the Worldscale Association's initial July 8, 2024, notice that it will include EU ETS carbon costs in its flat rates for 2025.

Discontinuation of existing carbon-accounted assessments

As a result of the transition to carbon-inclusive freight, carbon-accounted tanker freight assessments(opens in a new tab) launched July 1, 2024, for all routes involving EU ports will become redundant. Platts will discontinue these assessments effective Jan. 2, 2025, to avoid duplication.

Impact on Platts Dated Brent

The 10-day rolling average of the Aframax 80,000 mt 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 will be carbon-inclusive from Jan. 2, 2025, based on this decision.

Please send all feedback and comments 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.