The London Metal Exchange (LME) has started to explore whether it can establish a premium price for sustainable supplies of four metals key to the green transition. The company said it is engaging closely with physical market stakeholders on its proposals for nickel, copper, aluminium and zinc. It says, “By making a sustainability price differential public, the value attached to sustainable metals will be transparent and could support the development of the market for sustainable metals”.
Matthew Chamberlain, LME CEO, said: “Our conversations with stakeholders have shown that there is support for establishing a way to reflect an LME brand’s sustainability in its price. There is a growing sophistication in industry sustainability standards and accreditation programmes that cover broad criteria for different metals markets.”
He added, “We are setting out proposals that we believe will support the formation of sustainable premia that will be accessible to the whole market. They will unlock the value attached to sustainability and have the potential to drive the development of the market for more sustainable metals.”
Previously LME partnered with Metalshub, a digital platform, on an initiative launched in 2024 to develop a price discovery mechanism for low-carbon nickel.
The LME is now proposing to launch a broader series of sustainable metal premia for LME-branded aluminium, copper, nickel and zinc. Metal brands that meet criteria would submit sustainability credentials via LMEpassport. Such metal could then contribute to the price discovery of the sustainability premia via Metalshub’s spot offering.
To enable the Metalshub transaction data to be published as a price premium, the LME is proposing to establish a pricing administrator whose role would be to use trading data and apply expert judgement to publish prices.
Nick Stansbury, Head of Climate Solutions, Asset Management, L&G said: “We welcome the LME’s proposal as a much-needed move to enable the proper pricing of low-carbon, sustainable products. We believe transparent pricing of sustainable materials is critical to incentivising investment into transition technologies in the mining industry and we look forward to the outcome of this market engagement process.”