Platts CEC price assessment will reflect Phase 1 CORSIA credits from Jan 2

Platts, part of S&P Global Commodity Insights, will reflect credits eligible under Phase 1 of the CORSIA scheme in its CEC assessment from Jan. 2.

As such, Platts CEC will continue to reflect CORSIA-eligible credits once the Pilot phase of the program ends, and evolves to Phase 1, from January 2024.

Platts opened a consultation Oct. 9 on how to evolve its CEC assessment in the context of the upcoming expiry of the Pilot phase of the International Civil Aviation Organization (ICAO) CORSIA scheme, and the start of Phase 1.

The consultation launch note is available via this link: https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/100923-platts-seeks-feedback-on-capturing-shift-from-corsia-pilot-to-phase-1-within-cec-assessment

Platts proposed to reflect CORSIA Phase 1 eligible credits in its CE assessment in a note published on Nov. 13 and available via this link:

https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/111323-platts-proposes-cec-to-reflect-phase-1-corsia-credits-from-jan-2024

Under the ICAO, airlines have committed to reducing their carbon footprint through an initial voluntary period -- the Pilot Phase, 2021-2023 -- and a subsequent mandatory reduction period -- Phase 1, 2024-2026 and Phase 2, from 2027 onwards -- according to the registry and methodology limits set out here. [https://www.icao.int/environmental-protection/CORSIA/Pages/default.aspx ]

To date, Platts CEC has reflected market activity for CORSIA-eligible credits during the Pilot phase, but Platts has not specified any further which phase of the CORSIA program its CEC assessment covers.

Vintages reflected in the assessment have been 2016-2020, as outlined by the CORSIA scheme for the Pilot phase.

Under Phase 1, vintages eligible under CORISA will roll to 2021-26.

Furthermore, as an additional criteria of Phase 1, a Corresponding Adjustment will need to be attached to the credit, guaranteeing that the host country will not claim the credits against its climate goals.

That is to avoid double counting.

As such, from Jan. 2, Platts will reflect bids, offers or trades in which a seller commits to deliver a credit that will have a Corresponding Adjustment and that will meet any other criteria necessary for eligibility under CORSIA Phase 1.

The assessment will reflect 2021-2026 vintages, as is to be required by Phase 1.

Furthermore, Platts will widen the volume represented by the Platts CEC assessment, from the current 1,000 to 20,000 mtCO2e range, to a 20,000-100,000 mtCO2e range.

Bids, offers and transactions that exceed this maximum may be normalized for the purposes of assessment.

In addition, Platts currently publishes CEC for current year delivery only, but will launch a Platts CEC assessment for delivery one year forward starting from March 4.

For example, in March, Platts will publish a Platts CEC Current Year assessment, which will reflect CORSIA Phase 1 credits for delivery in 2024, and a Platts CEC Yr01 price assessment, which will reflect CORSIA Phase 1 credits for delivery in 2025.

Full details on the current specifications of Platts CEC are set out in the Carbon Markets Specifications Guide available here: https://www.spglobal.com/commodityinsights/PlattsContent/_assets/_files/en/our-methodology/methodology-specifications/method_carbon_credits.pdf

Please send any feedback to Platts_Carbon@spglobal.com and pricegroup@spglobal.com by Dec. 27.

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.