S&P Global Platts to launch new Low-Carbon, Zero-Carbon Aluminum Prices

S&P Global Platts will launch two new low-carbon aluminum price assessments for the European market, effective April 6, 2021.

The new daily assessments, which complement existing Platts European price offerings for high-grade P1020, will include a Low-Carbon Aluminum Price (LCAP) and a Zero-Carbon Aluminum Price (ZCAP) for Good Western-origin, minimum 99.7% aluminum ingot meeting London Metal Exchange high-grade specifications. Both assessments will reflect typical shipments of 100-1,000 mt, in-warehouse Rotterdam, on a duty-paid and duty-unpaid basis, net-30 day payment terms, in US dollars per mt.

The LCAP, which will be assessed as a premium to the LME cash-settlement price, will apply to P1020 with a maximum emissions level of 4 mt of CO2 per mt of aluminum at the smelter. Other quantities and emission levels will be normalized to this basis. Platts will only include aluminum in this assessment which has had its smelter Scope 1 and 2 emissions certified by an internationally accepted, independent organization.

In the absence of observable spot market activity, Platts may consider other verifiable data reported. Platts may observe direct market activity as well as the effect of movements in related markets through spread differentials, for example.

Platts is also launching the ZCAP for aluminum P1020 that will leverage Platts existing CORSIA-eligible carbon credit price assessments (CEC) to calculate the cost of offsetting the carbon emissions of the LCAP assessment to zero.

CORSIA, the Carbon Offsetting and Reduction Scheme for International Aviation, is referenced by a wide range of non-aviation industries as an acceptable approach for voluntarily curbing carbon's impact on climate change.

Platts' CEC assessment was launched in January 2021: https://www.spglobal.com/platts/en/our-methodology/subscriber-notes/010421-platts-begins-publishing-voluntary-carbon-credit-price-assessments-jan-4

It reflects credits from projects certified by the following groups: The Gold Standard, Climate Action Reserve (CAR), Verified Carbon Standard (VCS), Architecture for REDD+ Transactions, and American Carbon Registry. Platts reflects the methodologies for the above standards for the relevant types of carbon credit projects as specified by the International Civil Aviation Organization (ICAO).

The daily CEC assessment, measured in US dollars per mt CO2-equivalent ($/mtCO2e), represents five lots of 1,000 CO2e units each and reflects bids, offers and trades for any CORSIA-eligible credits verified by the above groups.

Platts is launching these new LCAP and ZCAP assessments following extended engagement with market participants throughout the aluminum value chain. These new assessments align with S&P Global's strategic focus on offering ESG-related commodities pricing and financial products, and are in response to requests from market participants for tools to help quantify cost and manage risks and opportunities associated with a growing focus on carbon-reduction strategies and increasing global regulation.

While Platts is initially providing new low-carbon pricing focused on aluminum, it also plans to launch additional price and cost references throughout the metals and raw materials value chains. Platts welcomes feedback on its plans for expanding low-carbon pricing offerings, as well as for coverage of other market segments of particular interest.

Please send all comments to PL_Metals_Editorial@spglobal.com and pricegroup@spglobal.com by April 1, 2021. 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.