November 3, 2023
On Tuesday, October 31, CARB posted the second quarter 2023 data for the LCFS program. In today’s flash report, we offer a quick look at the second quarter data. Our comprehensive analysis will be published in Stillwater’s Quarterly LCFS Newsletter which will be available to subscribers on Thursday, November 16th.
The second quarter data show a net credit of 1,596,809 metric tons (MT), up from the first quarter net credit of 1,336,397 MT. With the 2Q2023 net credit, the credit bank now stands at a record 18.1 million MT.
The table below summarizes the second quarter by fuel and compares it to the previous quarter (1Q2023) and to the same quarter last year (2Q2022).
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A quick look at these data shows a few trends of interest. The major factors contributing to the increase in net credit in the second quarter compared to the first quarter were: increases in net credits for renewable diesel (RD), renewable natural gas (RNG), and on-road electricity. These increases in net credits were offset by reductions in net credits from ethanol and biodiesel (BD), and an increased CARBOB deficit. Compared to the first quarter, 2Q2023 showed a 13.3% increase in RD credits on a large 18.9% volume increase, 27.8% increase in RNG credits on a 5.1% volume increase, and a 9.9% increase in on-road electricity credits on a 10.8% volume increase. Net credits for ethanol decreased by 15.8% on a 14.7% volume decrease. BD showed a decrease in average CI, and a volume decrease of 12.1% compared to 1Q2023. Net credits for alternative jet fuel increased 49.5% on a 46.9% volume increase. CARBOB deficits increased by 7.8% on a like increase in volume. ULSD volumes and deficits were little changed from the prior quarter.
The total net credit for the second quarter was up from the prior quarter and marked a 0.2 million MT increase compared to a year earlier (2Q2022). Together, RNG, on-road electricity, and RD played the biggest roles in the year-on-year increase in net credits.
We will provide an in-depth analysis of this data in our upcoming quarterly newsletter, to be published on November 16, 2023. Access to Stillwater’s LCFS Newsletter is only available to subscribers. For more detailed information on LCFS data trends and analysis, be sure to subscribe!
What does this quarterly data mean for Credit Prices?
Stillwater offers a full suite of credit price outlooks offering our view of the California Low Carbon Fuel Standard (LCFS), Oregon Clean Fuels Program (CFP), British Columbia LCFS (BC-LCFS) and U.S. Renewable Fuel Standard (RFS) markets through 2035. We also offer a proprietary lipid biomass feedstocks outlook. These outlooks are offered through our consulting practice, and each outlook comes with a one-hour, one-on-one Q&A session with our senior subject matter experts!
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