Platts proposes to include EU ETS carbon offsetting costs in its Aframax UKC-UKC assessments from May 1

Effective May 1, Platts, part of S&P Global Commodity Insights, proposes to include the EU's Emissions Trading Systems (EU ETS) carbon offsetting costs in its dirty Aframax 80,000 mt UK Continent-UK Continent Worldscale (PFAKD10) and $/mt (TDACD00) assessments to reflect prevailing tanker spot trade patterns since the shipping industry's inclusion in the EU ETS on Jan. 1.

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 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 2022 v1.2 General Terms and Conditions.

Platts proposed to include the EU ETS carbon emission offsetting costs in its global clean and dirty freight assessments from March 1, with the exception of the Aframax cross-UKC assessments in a subscriber note here(opens in a new tab).

Tanker freight in markets where the loading and/or discharge ports fall within the scope of the EU ETS will be assessed by Platts in line with the existing freight methodology, which can be seen here(opens in a new tab). Fixtures and market indications exclusive of carbon costs will be normalized to carbon-accounted levels. For example, if some freight indications are reported on a given route excluding the cost of offsetting the carbon dioxide emissions and others are reported including that cost, the Platts freight rate will be assessed basis the latter value and the exclusive indications will be normalized.

This is in line with market feedback, as roughly 80% of fixtures reported to Platts in EU load/delivery ports are inclusive of carbon offsetting costs. Platts has proposed to discontinue its carbon-accounted freight assessments in a subscriber note here(opens in a new tab), but will continue to publish carbon emission charges on selected routes to provide accurate guidance on the EU Allowance cost of certain tanker freight routes.

This proposal modifies Platts tanker freight assessment methodology excluding EU ETS as announced in a clarification subscriber note (opens in a new tab)on Nov. 2, 2023.

Platts will continue to monitor and review the situation and publish any bids, offers, trades or indicative market values both inclusive and exclusive of EU ETS carbon offsetting costs as those become available.

Please send all comments or questions by March 15, 2024, to tankers@spglobal.com and 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 to the public upon request.