January 29, 2021
On Friday afternoon, January 29th, CARB posted the third quarter 2020 data for the LCFS program. The 3Q2020 report gives us insight into the credit bank situation for the six months following COVID-19 stay-at-home orders. In today’s flash report, we offer a quick look at the third-quarter data. Our comprehensive analysis will be published in Stillwater’s Quarterly LCFS Newsletter which will be available to subscribers on February 9th.
The third-quarter data shows a slight build in the credit bank of 116,000 metric tons (MT) of credits, a reversal from the 2Q2020 drawdown of 131,000 MT and 3Q2019 drawdown of 155,000 MT. With the 3Q2020 net credit, the credit bank ends the third quarter of 2020 at 7.6 million MT.
The table below summarizes the quarter and compares it to the prior quarter and same quarter last year.
A quick look at this data shows a few trends of interest. Credits generated from renewable natural gas (RNG) grew nearly 45%. Less than half of this growth was due to additional volume; more than half of the growth in credit generation from RNG was due to improved average CI for the RNG pool. Credits generated from ethanol recovered from an unusually low volume in 2Q2020 as ethanol volumes recovered and the average CI of ethanol decreased from 62.12 gCO2e/MJ in the second quarter to 57.77 gCO2e/MJ in the third, a record improvement to the CI of ethanol. (We will explore the reasons for this decline in the average CI of ethanol in our full quarterly analysis.) Electricity, renewable diesel, and biodiesel also showed significant credit increases. CARBOB and ULSD deficits increased as volumes recovered from initial pandemic demand destruction in 2Q2020.
We will provide an in-depth analysis of this data in our upcoming quarterly newsletter, published on February 9, 2021. 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! Your first two weeks are free, so subscribe today to receive our Quarterly Analysis in your trial period.