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News Update
- California aiming for faster heavy vehicle transition. New draft regulations discussed in the February LCFS workshop would require manufacturers of heavy vehicles to offer all zero-emissions models by 2036, up from the previous target of 2040. The state's Advanced Clean Fleets rule would extend their electrification ambitions in place for passenger vehicles towards box trucks, port equipment, government fleets and other machinery associated with commerce and mass transit. The draft would also limit the lifecycle of certain equipment to ensure turnover, but many vehicles would still be allowed to operate without replacement for up to 18 years or 800,000 miles.
- CARB workshop lays groundwork for new LCFS amendments. California Air Resources Board (CARB) presented new updates to the 2022 Scoping Plan in the February 2023 LCFS workshop. Staff released a draft regulatory text notably implicating increased stringency from the 2030 target of 20%, presenting new potential carbon intensity reduction targets of 25%, 30%, and 35%. Of these targets, CARB used the 30% reduction by 2030 and 90% by 2045 for modeling during the workshop, which many attendees supported, and suggested “step changes” towards compliance target stringency will be needed in the short term to send strong price signals and increase ambitions for 2030. Staff also discussed transitioning away from fossil fuel to clean fuel production, specifically wanting to phase out avoided methane crediting and the use of RNG as a primary fuel by 2040 as CARB expects the demand for compressed natural gas to be limited in transportation. Before wrapping up the workshop, staff also explored support for continued private investment in low-carbon fuel production, considerations for integrating opt-ins like aviation, and measures to ensure that fuel and technology deployments in the future do not result in unintended consequences.
- CARB urged to keep LCFS incentives. Supporters of renewable natural gas and fuel have urged CARB staff against limiting renewable natural gas and crop-based renewable fuel feedstocks credits as the agency hopes to make changes to the program for 2024. Supporters continue to encourage CARB to set targets at least 50% tougher than the current program mandate of a 20% reduction in carbon intensity for transportation fuel in the state by 2030.
- Los Angeles utility now offering LCFS credits. The Los Angeles Department of Water and Power sought bids for up to 10,000 California LCFS credits in February. The utility generates program credits by supplying power and compressed natural gas for transportation.
- Oregon CFP deficits continue to outpace LCFS supplies. New deficits in the Oregon Clean Fuels Program (CFP) increased by 13% this quarter while new credits fell by 1.7%. According to the Oregon Department of Environmental Quality (DEQ), the number of implied credits available for LCFS compliance fell by 15%. This marks the third consecutive quarter of unused credits drawing down.
LCFS Schedule
- April 3rd, 2023: California LCFS Q4 2022 Reporting Deadline
- April 28th, 2023: California LCFS Q4 2022 Data Release
- June 30th, 2023: California LCFS Q1 2023 Reporting Deadline
- July 31st, 2023: California LCFS Q1 2023 Data Release
LCFS Credit Pricing
Credits Price as of March 15th, 2023:
- California - Spot Delivery $ 71.50
- Oregon - Spot Delivery $ 123.00
Monthly LCFS Credit Transfer Activity for California
Time
|
Transfers
|
Total Volume
|
Avg $/credit
|
23-Feb
|
(Data pending at the time of this report’s release)
|
23-Jan
|
470
|
4,564,000
|
$81
|
22-Dec
|
292
|
3,001,000
|
$86
|
22-Nov
|
181
|
2,379,000
|
$81
|
22-Oct
|
555
|
5,005,000
|
$106
|
22-Sep
|
179
|
1,759,000
|
$102
|
22-Aug
|
153
|
1,624,000
|
$97
|
22- Jul
|
439
|
3,680,000
|
$117
|
22-Jun
|
133
|
1,268,000
|
$113
|
22-May
|
119
|
861,000
|
$125
|
22-Apr
|
468
|
4,584,000
|
$153
|
22-Mar
|
280
|
3,301,000
|
$158
|
22-Feb
|
159
|
1,550,000
|
$163
|
CY 2022
|
3,137
|
30,641,000
|
$125
|
CY 2021
|
2,664
|
25,279,000
|
$187
|
CY 2020
|
2,461
|
21,728,000
|
$199
|
CY 2019
|
1,656
|
14,146,000
|
$192
|
CY 2018
|
1725
|
13,334,000
|
$160
|
CY 2017
|
1226
|
8,875,000
|
$89
|
CY 2016
|
929
|
5,343,000
|
$101
|
CY 2015
|
578
|
2,852,000
|
$62
|
CY 2014
|
304
|
1,667,000
|
$31
|
CY 2013
|
202
|
887,000
|
$55
|
Source: https://ww2.arb.ca.gov/resources/documents/monthly-lcfs-credit-transfer-activity-reports
LCFS Cost for Gasoline and Diesel
Cost as of March 15th, 2023 for Vintage 2023:
- California
- Carbob (No Cl ethanol) - Vintage 2022 9.67 cents per USG
- Carbob (79.9 Cl ethanol) - Vintage 2022 9.18 cents per USG
- Oregon
- E10 gasoline - Vintage 2022 9.29 cents per USG
- B5 diesel – Vintage 2022 10.59 cents per USG
Market Update
- On average, California LCFS traded at $64.50 in February, which is ~0.65% higher than the January average of $64.08.
- California officials held the February LCFS workshop and discussed changes to LCFS rules, which likely caused the short-lived changes in price volatility stemming from market speculation.
- CARB reported 125 transactions in February*, a 376% increase from the 470 reported in January. The traded volume was equal to 1,092,492 credits compared to 4,564,000 credits in January, or a 418% increase. February weighted-average price was $69.20, whereas the reported average spot price was 7.86% lower and equal to $63.76
- California LCFS credits have been trading slightly higher after reaching a new six-month high of $74.00 on Feb. 22nd. The sudden price spike was likely due to the speculation surrounding the LCFS workshop as prices began returning to the monthly average the next day on the 23rd.
- Oregon LCFS credits have remained mostly flat over the month of February, starting at $122.00 and holding the same price until Feb. 21st where it increased by 50¢ and stayed through the end of the month, closing at $122.50.
* CARB transaction data reported through February 26th, 2023. Monthly CARB data including the 27th through the 28th still pending at the time of this report’s release.
Figure 1. California LCFS USD/mt March 2022 - Present
|
|
2022 Average Daily Price: $ 98.35
|
2023 Average Daily Price: $ 65.00
|
2022 Highest Daily Price: $ 153.50
|
2023 Highest Daily Price: $ 74.00
|
(January 6th, 2022)
|
(February 22nd, 2023)
|
Figure 2. California Monthly LCFS Credit Price and Transaction Volume as Reported by ARB
Figure 3. Oregon LCFS USD/mt March 2022 – Present
|
|
2022 Average Daily Price: $117.85
|
2023 Average Daily Price: $121.64
|
2022 Highest Daily Price: $126.50
|
2023 Highest Daily Price: $123.00
|
(February 17th, 2022)
|
(March 9th, 2023)
|
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