S&P Global Platts Launches SAF and HVO values in Asia

Rhea-AI Summary

S&P Global Platts has launched new price assessments for sustainable aviation fuel (SAF) and hydrotreated vegetable oil (HVO) in Southeast Asia, effective January 18, 2021. This initiative aims to improve transparency in renewable fuel markets as Asia emerges as a significant producer of advanced biofuels. The launch follows previous assessments in Europe and the US. Demand for cleaner fuels is rising as countries pursue renewable energy solutions to meet Paris Agreement commitments. Platts aims to enhance the global renewable fuel market's accessibility and transparency.

Positive

• Launch of SAF and HVO assessments enhances market transparency in Southeast Asia.
• Asia's HVO production expected to exceed 2.6 million metric tonnes by 2030, signaling growth potential.
• Company well-positioned to cater to increasing demand for renewable fuels.

Negative

• Physical market trading for SAF and HVO has not reached sufficient volumes for spot price assessments.

SINGAPORE, Jan. 19, 2021 /PRNewswire/ -- S&P Global Platts ("Platts"), the leading independent provider of information and benchmark prices for the commodities and energy markets, has launched new sustainable aviation fuel (SAF) and hydrotreated vegetable oil (HVO) price assessments in Southeast Asia effective January 18, 2021. The new assessments will enhance transparency in renewable fuel markets across Asia as the region is set to become a large producer of advanced biofuels.

The new Platts Southeast Asia SAF, and Platts Southeast Asia HVO, as well as a Used Cooking Oil price assessment in Asia called UCO North Asia follow Platts first-to-market Northwest European SAF and HVO assessments launched on August 17 last year, as well as the launch of SAF values for the US West Coast on September 21.

In compliance with Paris Agreement commitments, countries in Asia have a number of options at their disposal to replace fossil fuels with renewable sources of energy. With growing consumer awareness of the environmental impact of transportation, cleaner fuels like SAF synthesized from renewable feedstocks are emerging as a compelling solution to achieve emissions reductions within the aviation sector itself, in addition to the purchase of carbon credit offsets. Despite the move towards decarbonization, the physical market trading for many of these commodities has not yet reached sufficient volumes to support spot price assessments, therefore the cost-based price for SAF published by S&P Global Platts will be based on existing assessments and other fixed costs.

Ian Dudden, global pricing director, Metals and Agriculture, S&P Global Platts, said: "Southeast Asian governments are pursuing aggressive renewable fuels targets which are set to intensify in the future. Embracing advanced biofuels such as HVO and SAF will play an important role in helping nations achieve those goals. In addition, major airlines are already looking at sustainable aviation fuels on a voluntary basis to reduce their carbon footprint. With these Asia-based price assessments rounding out our global offering, S&P Global Platts is poised to bring greater transparency and access to the global renewable fuel market, helping the industry to transition and evolve."

Hydrotreated vegetable oil - HVO (also known as renewable diesel in America) is a biomass-derived transportation fuel suitable for use in diesel engines, like biodiesel. Unlike fossil fuels, it is made of nonpetroleum renewable resources such as natural fats, vegetable oils, and greases and can be blended in traditional diesel or used as a substitute. The majority of production today is derived from waste and residues, such as palm fatty acid distillate (PFAD), tallow (animal fat), and fish oil.

Patricia Luis-Manso, head of Agriculture & Biofuels analytics, S&P Global Platts said: "HVO production for road transport across Asia is forecast to exceed 1.8 million mt (metric tonnes) by 2025 and 2.6 million mt by 2030, up from 930,000 mt annual production in 2020. Investment to expand infrastructure such as NESTE's Singapore refinery, as well the launch of two HVO plants in Indonesia, will fuel the region's HVO production going forward."

The new SAF and HVO valuations reflect a FOB Singapore price, and the launch follows extensive consultation with producers, consumers, traders and others in the Asian, European and US oil and biofuel markets as the global demand for renewable diesel grows. The used cooking oil feedstock assessment for Asia reflects the region's position as a leading exporter.

The HVO assessment calculation assumptions, provided by Platts Analytics, are based on existing Platts assessments and other fixed costs. The HVO inputs are Used Cooking Oil North Asia and Japan Hydrogen SMR w/o CCS added to fixed renewable refinery costs, then deducting the byproducts of Propane Refrigerated CFR North Asia, Naphtha FOB Singapore cargo and Gasoil 0.001% sulphur FOB Singapore cargo. S&P Global Platts is committed to reviewing its methodology specifications and assumptions on an ongoing basis as the renewable diesel market evolves, and Platts will continue to engage with the marketplace.

Additional details about the S&P Global Platts SAF & HVO cost-based price assessment methodology can be found in the Subscriber Note.

Media Contacts:
Americas: Kathleen Tanzy + 1 917-331-4607, kathleen.tanzy@spglobal.com

About S&P Global Platts
At S&P Global Platts, we provide the insights; you make better informed trading and business decisions with confidence. We're the leading independent provider of information and benchmark prices for the commodities and energy markets. Customers in over 150 countries look to our expertise in news, pricing and analytics to deliver greater transparency and efficiency to markets. S&P Global Platts coverage includes oil, gas, LNG, power, petrochemicals, metals, agriculture and shipping.

S&P Global Platts is a division of S&P Global (NYSE: SPGI), which provides essential intelligence for individuals, companies and governments to make decisions with confidence. For more information, visit www.platts.com.

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SOURCE S&P Global Platts

FAQ

What is the significance of S&P Global Platts launching SAF and HVO price assessments in Asia?

The launch enhances market transparency for renewable fuels in Southeast Asia, catering to growing demand for sustainable energy sources.

What are the expected production figures for HVO in Asia by 2030?

HVO production in Asia is forecasted to exceed 2.6 million metric tonnes by 2030, up from 930,000 metric tonnes in 2020.

How does the SAF and HVO launch impact S&P Global Platts' market position?

The launch positions S&P Global Platts favorably in the growing renewable fuel market, meeting increased demand for transparency and pricing.

When did S&P Global Platts launch SAF and HVO assessments?

The SAF and HVO price assessments were launched on January 18, 2021.

What challenges do SAF and HVO markets currently face according to the S&P Global Platts press release?

The physical market trading for SAF and HVO has not yet reached sufficient volumes to support spot price assessments.