Today, CARB posted the third quarter 2025 data for the LCFS program. In today’s flash report, we offer a quick look at this third quarter data; our comprehensive analysis will be published in Stillwater’s Quarterly LCFS Newsletter which will be available to subscribers on Thursday, February 5th.
The third quarter data show a net deficit of 1,711,012 metric tons (MT), the first quarterly net deficit since 1Q2021. With the 3Q2025 net deficit, the credit bank now stands at 41.54 million MT. Note: for the first and second quarters of 2025, the CI-reduction standard was 13.75% as set in the 2018 amendment cycle; the 2024 amendments became effective at the start of the third-quarter reporting period (July 1, 2025), raising the CI-reduction standard to 22.75% for the last half of the year.
The table below summarizes the third quarter by fuel and compares it to the previous quarter (2Q2025) and to the same quarter last year (3Q2024).
A quick look at these data reveals that credits for almost all credit-generating fuels decreased from the last quarter. The major factors contributing to the decrease in net credits in the third quarter compared to the second quarter were decreases in net credits for on-road electricity, renewable diesel (RD), and ethanol. These fuels had large decreases in net credits despite slight increases in volume, with the exception of RD which also had a decrease in volume. Only renewable natural gas (RNG) and alternative jet fuel logged increases compared to the previous quarter.
On the deficit side, there was a 3,550,793 MT increase quarter-to-quarter in deficits as ULSD volumes increased while CARBOB volumes decreased. The total liquid diesel pool volume (ULSD, BD, and RD combined) rose 2% quarter-to-quarter while the portion of the liquid diesel pool made up of BD and RD fell to 64%.
Compared to the same quarter a year prior (3Q2024), the third quarter 2025 data showed a 7.6% increase in on-road electricity net credits on 20.5% increase in volume, a 34.3% decrease in RD credits on a 17.4% decrease in volume, and a 4% increase in RNG credits on a 2.6% volume increase. SAF showed a 6.3% increase in net credits on a 17.2% increase in volume compared to the previous year. Although the third quarter of 2025 saw a 2% increase in total liquid diesel volume compared to the prior quarter (2Q2025), the third quarter total was down by 8% from volumes seen in the third quarter of 2024.
Of course, the largest contributing factor to the changes in credit and deficit generation is the 9% step-change in CI-reduction target, which took effect on July 1, 2025.
We will provide an in-depth analysis of this data in our upcoming Quarterly LCFS Newsletter, to be published on February 5, 2026.
What does this net deficit mean for credit prices?
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