Source: London Metal Exchange
The London Metal Exchange (LME) today launched LMEpassport, a centralised digital register that stores electronic Certificates of Analysis (CoAs) and sustainability credentials for LME-listed metals.
LMEpassport stores digital versions of the previously paper-based CoAs, which are key specification and quality assurance documents that must accompany shipments of LME metals into and out of warehouses. Existing paper and PDF format CoAs can be easily scanned and digitised on the platform, transforming previously unstructured data into information that can be easily queried and reported on. Metal producers are encouraged to record information in LMEpassport at the point of production, thereby reducing the need for downstream stakeholders to access traditional CoA documents. LMEpassport also enables users to provide disclosures related to metals’ sustainability characteristics on a voluntary basis.
“The metals industry is increasingly embracing digital solutions to streamline manual processes for customers across the value chain,” said Robin Martin, LME Head of Market Development. “LMEpassport provides substantial benefits for users - not only by automating manual processes and reducing operational risk, but by providing greater transparency and access to provenance data, for which there is growing consumer demand.”
Sustainability taxonomy and credentials
Following collaboration with market stakeholders, the LME has developed a sustainability taxonomy (illustrated below), which provides LMEpassport users with a straightforward categorisation framework, making it easier to navigate the wide range of sustainability-related focus areas across metals. A number of certifications and disclosures have already been integrated into the framework so users can easily report against these fields from launch (see below).
Georgina Hallett, LME Chief Sustainability Officer, commented: “The metals industry already has a rich set of standards and certifications available, many of which have strong support from stakeholders. The value of LMEpassport is in providing a consolidated and comparable view of such information for different batches of metal. Crucially, LMEpassport will only permit the disclosure of datasets or certifications which are supported by the industry and which include adequate audit or validation documentation - so the information we provide access to can be trusted by the metals community.”
LMEpassport will be phased in for all metals that require CoAs, starting with LME Aluminium from 1 October 2021. From this date, all primary aluminium loaded out of LME warehouses will be accompanied by an electronic CoA on LMEpassport, allowing downstream users ready access to relevant information. Data will initially be populated by warehouse companies, in exchange for a small fee. By 1 January 2023, this will be applied to all LME metals requiring a CoA. And by 1 January 2024, producers of all LME-listed brands will be required to directly register new metal production details into LMEpassport, providing market-wide efficiencies of data access. Rules to give effect to LMEpassport have already been consulted upon with the market.
In the initial phase, sustainability data can be provided on a voluntary basis by any LME-listed brand. The LME has worked closely with producers to facilitate the provision of data, and will liaise with the market to monitor take-up, and decide next steps as appropriate.
• All physically settled LME contracts require CoAs with the exception of LME Copper.
• When metal is withdrawn, warehouse companies can charge up to $10 per warrant to register the CoA on LMEpassport (if not already registered), and the LME charges a $5 per warrant additional maintenance fee for the provision of the LMEpassport service.