S&P Global Commodity Insights - Carbon Markets Daily

Carbon Markets Daily

March 14, 2023

https://www.spglobal.com/commodityinsights/en/our methodology/subscriber-notes/013023-platts-proposes launch-of-korean-allowance-unit-korean-offset-credit-carbon assessments The decision was published Feb. 23 and is available here: https://www.spglobal.com/commodityinsights/en/ our-methodology/subscriber-notes/022323-platts-to-begin publication-of-korean-allowance-unit-and-korean-offset-credit carbon-assessments Platts has launched the following two assessments: Korea Allowance Units (KAUs) A daily assessment for the Korean Allowance Units (KAUs) that reflects the most competitively priced bids, offers and trades for current year, with the annual roll on the first working day of August, in line with the rules set out by the South Korean Ministry of the Environment. The Platts KAU assessment is published in Won/mtCO2e, where one KAU, when retired, allows for the emission of one metric ton of carbon-dioxide or equivalent. This means, for example, that on March 10, 2023, Platts KAU assessment will reflect KAUs vintage 2022, with retirement due before Aug. 1, 2023. On Aug. 1, 2023, Platts KAU assessment will reflect KAUs vintage 2023, with retirement due before Aug. 1, 2024. Korea Offset Credits (KOCs) A daily assessment for the Korean Offset Credits (KOCs) that reflects the most competitively priced bids, offers and trades for both domestic and international offset credits in line with the rules set out by South Korean Ministry of the Environment. The unit of assessment is Won/mtCO2e, where one KOC, when retired, offsets the emission of one ton of carbon-dioxide or equivalent. KOCs are Clean Development Mechanism (CDM) or Paris Agreement-compliant and reflect rolling three-year vintages, with each KOC expiring on the last working day of the calendar year. The daily Platts assessment reflects the KOC expiring at the end of the calendar year. For example, this means that on March 1, 2023, Platts will assess KOC 21-23, which expires at the end of 2023. On Jan. 2, 2024, the daily Platts assessment will reflect KOC 22-24. These offset credits should be CDM or Paris Agreement compliant, in line with existing South Korean government regulations. For both assessments, Platts publishes to a 1 pm Korea time assessment close and a minimum lot size of five contracts, with no maximum specified. These assessments will published in line with the Platts APAC Carbon holiday calendar. Full details of the publication dates for these assessments can be found here: https://www.spglobal.com/commodityinsights/en/our methodology/holiday All information that is used within the price assessment each day is published via Platts systems as market heards, and the source of that information is indicated as part of the heard. Platts collects market information from a variety of sources each day, but always aims to get a balanced view of the market.

These assessments are published in the Platts Carbon Markets Daily, on Platts Carbon Markets Alert and Energy Transition Alert, and in the Platts Pricing Database under the following codes: Assessment Daily Code Monthly Code Currency Korean Allowance Unit (KAU) AKAUA00 AKAUA03 KRW/mtCO2e Korean Offset Credit (KOC) AKAUB00 AKAUB03 KRW/mtCO2e Please send any further feedback to AsiaComplianceCarbon@spglobal.com , platts_carbon@spglobal.com and pricegroup@spglobal.com. For written comments, please provide a clear indication if they 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 upon request. Platts opens consultation on reference standards for Voluntary Carbon Credit assessments Platts, part of S&P Global Commodity Insights, is opening a consultation on whether it should include reference bases for its Voluntary Carbon Credit assessments to provide a consistent core standard and better reflect the changing dynamics of the market. Currently, the Platts Voluntary Carbon Credit assessment methodology reflects the most competitively priced and internationally fungible credits within a specific market category. Platts may normalize bids, offers and trades based on the technology, standard-certification, geography and co-benefits which may impact a specific project’s adherence to the principles of the voluntary carbon market including, but not limited to, additionality, no overestimation, and permanence. Normalization brings the value of non-standard market information in line with the value of the most competitively priced and internationally fungible credits. However, as the Voluntary Carbon market has continued to evolve, feedback from market participants has indicated that defining reference bases for Platts spot market Voluntary Carbon Credit assessments would provide more clarity, consistency and pricing transparency. A reference basis for a given assessment would serve as the new baseline to which non-standard market information was normalized. Platts is specifically consulting on whether and how to define the reference basis for each of its seven carbon credit assessments, as well as how these could be maintained over time:

„ Platts Renewable Energy „ Platts Methane Collection „ Platts Nature-Based Avoidance „ Platts Household Devices „ Platts Industrial Pollutants „ Platts Natural Carbon Capture „ Platts Tech Carbon Capture

Additionally, Platts acknowledges that the attributes that drive differentiation between carbon credits within the same


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