S&P Global Platts announced that it will launch the first ever daily carbon offset premiums alongside monthly carbon intensity calculations for 14 major crude fields around the world.
The marginal carbon intensity (CI) calculations for different oil fields will help producers, investors, shareholders and downstream purchasers better understand the emission attributes of the crude where over time the carbon intensity of the production process can become its own attribute of the crude itself, like the density of the crude and how much sulfur is included.
Increased scrutiny of the upstream carbon intensity associated with the production of fossil fuels has led to investors, consumers and producers looking to reduce their carbon footprint or emissions, which has resulted in a growing demand for "low-carbon crude". Calculating the carbon intensity of different commodities has become one of the ways the market has started to measure greenhouse gas (GHG) emissions from specific types of production. Oil produced with a lower amount of GHG emissions has a lower carbon intensity than crudes produced with higher emissions. In turn, crudes that are produced with a higher volume of GHG emissions have a higher carbon intensity. Hence high CI crudes will carry a greater carbon intensity premium and require a greater volume of voluntary carbon credits to offset emissions than crudes with a lower CI.
Courtesy of S&P Global Platts.