Leading commodity and energy price provider S&P Global Platts has launched daily prices showing the cost of carbon emission reductions from using biofuels, the company announced on 2 September.
The new calculations, spreads and ratios used existing Platts assessments in global biofuels, refined product and carbon credit markets to show the actual cost of carbon emission reductions from biofuel use, the company said.
“These prices give traders, analysts and policy makers granular insight into the cost fuel buyers pay to reduce greenhouse gas emissions using biofuels, as well as the price relationships between biofuels and conventional fuels,” Ian Dudden, global pricing director for agriculture and metals, S&P Global Platts, said.
“More stringent climate policies around the globe demand transparency around not just the price of fuels, but the role those fuels play in meeting emissions targets.”
The new Platts price calculations include spreads and ratios between existing Platts assessments, such as ethanol and gasoline, as well as renewable diesel and fossil-fuel diesel.
Values per-point-of-carbon intensity under California’s Low Carbon Fuel Standard are also included along with calculated costs of reducing greenhouse gas emissions under Europe's Renewable Energy Directive using Platts’ biofuel and fossil fuel assessments.
“These prices … can help market participants compare fuels on a carbon emissions basis and build emissions costs into forecasts,” Sophie Byron, associate pricing director, Agriculture Americas, S&P Global Platts, said.
“With biofuel feedstock demand rapidly increasing, these prices can help the market make informed decisions about the emissions reduction differences between waste products, vegetable oils and other feedstocks.”
For example, while Platts’ existing assessments gave the market a transparent view into the price of biofuels such as rapeseed-based biodiesel (RME) in Europe, the new prices drilled down into relationships between RME and ultra-low sulphur diesel (ULSD), both in outright price terms and in carbon costs, the company said.