Platts proposes adding calculated EU ETS costs to ammonia freight assessments

Platts, part of S&P Global Energy, is proposing to add calculated EU Emission Trading System (ETS) carbon costs to several existing model-based ammonia freight assessments, effective March 2, 2026.

In view of the EU ETS scheme reaching full coverage for shipping in 2026 and on the back of demand from stakeholders in the market for inclusion of these costs in existing ammonia freight assessments, Platts is proposing to include calculated ETS costs in the following assessments:

• Ammonia Freight Caribbean-Northwest Europe 25,000 metric ton (FACTB00)
• Ammonia Freight US Gulf-NWE 25,000 mt (FACTY00)
• Ammonia Freight Algeria-NWE 15,000 mt (FACTH00)
• Ammonia Freight Middle East-NWE 25,000 mt (FACTI00)
• Ammonia Freight EC Canada-NWE 25,000 mt (FACTW00)

The proposal follows market feedback that the phased-in inclusion of shipping in the EU ETS has increased costs associated with visiting ports within the EU, and Platts understands that a significant portion of trading activity in the ammonia freight market is being conducted as carbon-inclusive.

Under the proposal, the freight rates would reflect all the costs of a round voyage for a gas carrier involving European ports, which include EU Allowances (EUA) charges, in addition to the existing costs considered.

These existing costs and assumptions -- for example, port fees, ship dynamics such as speed and fuel use -- are determined according to standard assumptions used by market participants, according to industry consultation.

The additional carbon costs would be calculated based on distances travelled within and outside Emission Control Areas (ECA), estimated bunker consumption by fuel type for each area, and carbon conversion factors published in Annex 1 of Regulation (EU) 2015/757 of the European Parliament and of the Council on the monitoring, reporting and verification of CO2 emissions from maritime transport:

In line with EU Directive 2023/959 of May 10, 2023, the updated freight prices would reflect the costs to offset 50% of CO2 emissions for all inbound and outbound voyages between the EU and non-EU member states.

Please send any feedback, questions and comments to fertilizer@spglobal.com and pricegroup@spglobal.com by Jan. 30.

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