OPIS Launches Carbon Neutral Fuels Index, Core Carbon Credits and Climate Community and Biodiversity Standards Assessments for Price Transparency into Emissions Offsetting Strategies

(IHS Markit/Business Wire) Extends the OPIS voluntary carbon pricing suite to 55 daily assessments and provides solutions to stakeholders targeting emission reductions -- OPIS, an IHS Markit (NYSE: INFO) company, the leading benchmark provider for carbon and fuels markets data, has expanded its Global Carbon Offsets Report in response to demand for pricing transparency into carbon offsetting strategies.

Today, OPIS introduces the daily Carbon Neutral Fuels Index (OPIS CNFI) to offer a view into carbon-neutrality strategies across the energy industry by providing a comprehensive range of prices for the cost of offsetting fuels emissions through retiring carbon credits.

The OPIS CNFI includes the emissions offsetting price for 18 standard liquids and gaseous fuels, as well as the eight International Maritime Organization’s (IMO) shipping fuels, utilizing OPIS-derived carbon dioxide equivalent (CO2e) emissions factors from regulatory agencies.

OPIS is also launching a Core Carbon Credits (OPIS CCP) assessment in tandem with the new Carbon Neutral Fuels Index, providing a single price for standard carbon credits trading in the voluntary carbon market. The OPIS CCP reflects CORSIA-eligible credits, REDD+ credits, as well as other agriculture, forestry, and land use (AFLOU) credits.

The OPIS CCP average price was around $11.775/mt, with a low of $7.40/mt and a high of $16.15/mt around 8:30 a.m. ET.

Looking at liquified natural gas strategies, the average cost to attain carbon neutrality was $0.65/MMBtu, based on an OPIS CNFI LNG range of $0.41-$0.89/MMBtu. OPIS assessed DES Northeast Asia LNG prices for February delivery at $22.95/MMBtu on January 14. Taking these assessments into account, the average total cost of a carbon-neutral 3.5 Bcf-equivalent LNG cargo in Northeast Asia was around $82.6 million, with $2.3 million attributed to the cost of purchasing and retiring carbon credits.

"Carbon-neutral supply and shipping contracts are now a prevailing stop-gap measure while the world is retooled with low-carbon technologies and zero-emissions fuels," said Fred Rozell, president, OPIS by IHS Markit. "Price clarity is imperative for negotiating a fair and competitive premium to existing commodities benchmarks for the cost of offsetting emissions."

Resourceful fuels sellers entered the voluntary carbon market last year with a new decarbonization plan—procure offsets to create carbon-neutral services. The voluntary carbon market surpassed $1 billion in 2021 as the carbon abatement tactic spread across fuels sectors and the supply chain.

Carbon offsetting strategies emerged as the global energy transition gained traction in the past couple years, with countless corporations making plans for net-zero emissions during the next few decades. In the interim, fossil fuels continue to power the world, and eco-minded shareholders and customers seek emissions reduction solutions now with high-quality carbon credits.

To further expand the voluntary carbon market price suite and in acknowledgment of the importance of carbon credits’ quality in reaching environmental, sustainability and governance goals, OPIS has also launched a Climate Community and Biodiversity Standards (OPIS CCB) assessment. The OPIS CCB reflects the co-benefits price premium associated with Verified Carbon Units (VCUs) that are certified by Verra’s CCB Program.

The OPIS CCB assessment meets demand from environmental project developers to quantify the value associated with carbon credits that go beyond addressing climate change and carry Sustainable Development Goal (SDG) co-benefits.

The OPIS CCB average price was $2.25/mt, with a low of $2/mt and a high of $2.50/mt around 8:30 a.m. ET.

The new price assessments are published to the daily OPIS Global Carbon Offsets Report, which launched in December 2020 to meet the demand for benchmark pricing for voluntary carbon markets. The OPIS Global Carbon Offsets Report, along with the daily OPIS Carbon Market Report, provide the largest compliance and voluntary carbon market price suite by any price reporting agency in the world. OPIS’s robust and comprehensive coverage of the carbon markets enables global project developers, traders, marketers and investors to accurately identify a fair value for their assets and understand compliance costs associated with carbon and emissions programs.

OPIS carbon assessments reflect confirmed bids, offers and trades reported by approved traders, brokers and electronic platforms. Full details about the OPIS voluntary and compliance carbon methodologies can be found in OPIS Carbon Market Pricing.

For further information about the OPIS Global Carbon Offsets Report, contact Lisa Street, OPIS Director of Global Carbon Pricing, at lstreet@opisnet.com.

About OPIS (www.opisnet.com)

Oil Price Information Service (OPIS) by IHS Markit (NYSE: INFO) provides accurate pricing, real-time news and expert analysis across the global fuel supply chain, including the Spot, Wholesale Rack and Retail markets. OPIS and OPIS PetroChem Wire enable customers to buy and sell oil and gas products with confidence via easy access to transparent data, expert-level customer support, educational events and energy data solutions with Axxis Software and OPIS RetailSuite.

About IHS Markit (www.ihsmarkit.com)

IHS Markit (NYSE: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 business and government customers, including 80 percent of the Fortune Global 500 and the world’s leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth. READ MORE

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