Platts proposes to amend minimum volumes, introduce maximums to its Voluntary Carbon Credit Assessments

Platts, part of S&P Global Commodity Insights, proposes to amend the minimum volumes reflected in its voluntary carbon credit spot market assessments and to introduce a maximum volume reflected from Jan. 2, 2023.

The proposal follows on from the Platts Voluntary Carbon Markets methodology consultation here: https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/062822-platts-to-launch-voluntary-carbon-markets-methodology-consultation

As part of the consultation, Platts sought feedback from market participants on various elements that make up the Platts voluntary carbon credit methodology.

The feedback was sought as part of the process to ensure the Platts assessments reflect the fast-evolving market.

The proposed change would widen the scope of the Platts voluntary carbon credit spot market assessments, introducing the option of normalization for transactions of varying volume.

Market feedback provided to Platts indicates that the volume of bids, offers and transactions can have a significant impact on price.

Platts proposes to amend the minimum volume reflected in its Renewable Energy and Methane Collection assessments to 50,000 mtCO2e, with a maximum volume of 150,000 mtCO2e.

Under the current methodology, Platts reflects bids, offers and transactions for Renewable Energy and Methane Collection carbon credits of 20,000 mtCO2e with no maximum.

Platts has observed that individual bids, offers, and transactions for these types of credits tend to be larger than for other types of credits.

Further, Platts proposes to maintain the minimum volume reflected in its Platts CAC, Nature-Based Avoidance, Household Devices and Industrial Pollutants assessments at 20,000 mtCO2e, but is proposing to introduce a maximum volume of 100,000 mtCO2e.

Under the current methodology, these assessments have no maximum volume.

Platts has observed within the Avoidance market that volume can vary widely depending on the type of credit being reflected, with bids, offers, and trades in the Nature-Based Avoidance space trending towards larger volumes, for example, and towards smaller volumes in the Household Devices market.

Platts is proposing the current volume changes to best capture the Avoidance Credit market as a whole.

Finally, Platts proposes to amend the minimum volume reflected in its Platts CRC, Technological Carbon Capture, and Natural Carbon Capture assessments to 5,000 mtCO2e, while introducing a maximum reflected volume of 50,000 mtCO2e.

Currently these assessments reflect bids, offers and transactions of a minimum of 20,000 mtCO2e and no maximum.

Platts has observed that the volumes of individual bids, offers and transactions in the removals market are lower than in the avoidance market.

Please send any feedback to platts_carbon@spglobal.com and pricegroup@spglobal.com by Nov. 11.

For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing.