The London Metal Exchange (LME) has launched an initiative to assess the potential for sustainable metal price premia across its approved brands, signaling a move to make the value of low-carbon and responsibly produced metals more transparent. The exchange is currently engaging with physical market participants on a proposal covering aluminium, copper, nickel, and zinc.
The introduction of publicly reported sustainability premia could formalize the market value of environmentally and socially responsible production, providing an incentive for investment in cleaner supply chains. According to the LME, this effort aligns with rising industry standards, global critical mineral strategies, and evolving accreditation frameworks.
“Ensuring that responsible metals receive fair market valuation”
Matthew Chamberlain, CEO of the LME, commented, “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. Taken together with the disclosure and comparability of these credentials through LMEpassport and our work with Metalshub, these developments provide the opportunity to establish credible sustainability pricing premia for LME-listed metals.”
The proposal builds on the LME’s ongoing collaboration with Metalshub, a digital trading platform that began reporting volumes for LME-grade low-carbon nickel in March 2024. That initiative uses a carbon threshold methodology developed by the Nickel Institute to help buyers identify and purchase certified low-carbon materials.
Under the expanded proposal, metal brands meeting broader sustainability criteria—beyond carbon footprint—would report their credentials through LMEpassport, the exchange’s centralized certification and documentation system. These metals would then be eligible to contribute to the price discovery process for sustainable premia via Metalshub’s spot platform.
The LME is also considering the appointment of an independent pricing administrator to oversee the process. This role would involve setting the rules and methodology for deriving sustainable premia from transaction data, with the ability for market participants to contribute data or raise issues regarding the pricing mechanism.
Dr. Frank Jackel, Co-Founder and Managing Director of Metalshub, commented, “Metalshub is proud to support the LME’s efforts to bring transparency and price discovery to sustainable metals. By integrating sustainability data into trading processes, we enable participants to make informed decisions, ensuring that responsible metals receive fair market valuation. Providing the technological foundation for price discovery will help to drive the industry towards a greener and more responsible future.”
Nick Stansbury, Head of Climate Solutions, Asset Management at Legal & General, added, “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.”
The LME will continue discussions with physical market stakeholders and expects to provide further updates as the initiative progresses. The proposed framework is part of the exchange’s broader commitment to fostering sustainable commodity markets through transparency, accountability, and robust infrastructure.
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