Energy and commodities markets information, benchmark and analytics provider S&P Global Platts announced today that it will begin publishing new low-carbon aluminium price assessments for the European markets, including a Low-Carbon Aluminum Price (LCAP), and a Zero-Carbon Aluminum Price (ZCAP), effective April 6. The company said that the launch marks the first of a planned suite of low-carbon metals and raw materials assessments.
According to S&P Global Platts, the launch comes in response to market participants’ desire for greater transparency in the low-carbon metals space. These entities range from producers seeking acknowledgement of the advances made in reducing carbon at the smelting stage to end-users increasingly demanding that suppliers certify the material they provide has been made with renewable energy or comes from low-carbon sources.
Ian Dudden, Global Pricing Director for Metals and Agriculture, S&P Global Platts, said:
“The launch of our green aluminum assessments follows extensive engagement with market participants throughout the aluminum value chain. These new prices align with S&P Global Platts’ strategic focus on offering ESG-related commodities pricing, and are in response to requests from market participants for new pricing transparency to help them quantify cost and manage risks and opportunities associated with a growing focus on carbon-reduction strategies and increasing global regulation.”
The Platts LCAP will be assessed as a premium to the LME cash-settlement price, and will apply to primary aluminum with a maximum emissions level of 4 metric tons (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.
The Platts ZCAP for primary aluminum will leverage Platts CEC, the firm’s existing CORSIA-eligible carbon-credit price assessments to calculate the voluntary cost of offsetting the carbon emissions of the LCAP assessment to zero.
“While Platts is initially providing new low-carbon pricing focused on aluminum, we also plan to launch additional price and cost references throughout the metals and raw materials value chains and we welcome feedback on our plans for expanding low-carbon pricing offerings. What sets Platts low-carbon price assessments apart is their daily frequency, as well as the ability of Platts to leverage expertise and price assessing capabilities across commodities and voluntary carbon sectors, which help market participants navigate the emerging global energy transition.”