Today, CARB posted fourth quarter 2025 data for the LCFS program. In today’s flash report, we offer a quick look at this fourth quarter data; our comprehensive analysis will be published in Stillwater’s Quarterly LCFS Newsletter which will be available to subscribers on Thursday, May 7th.
The fourth quarter data show a net deficit of 1,857,608 metric tons (MT), the second consecutive quarterly net deficit. With the 4Q2025 net deficit, the credit bank now stands at 39.69 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 fourth quarter by fuel and compares it to the previous quarter (3Q2025) and to the same quarter last year (4Q2024).
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A quick look at these data reveals that total credits decreased quarter-over-quarter, though performance was mixed across individual fuel categories. Most credit-generating fuels posted modest declines in net credits from the third quarter, including renewable diesel (RD), biodiesel (BD), bio-compressed natural gas (bio-CNG). Electricity credits rose approximately 2% quarter-over-quarter, and alternative jet fuel (commonly referred to as sustainable aviation fuel or SAF) credits rose nearly 30% quarter-over-quarter, while bio-LNG and renewable gasoline/naphtha credits also increased. The largest driver of the quarter-over-quarter decrease in total credits, however, was a large negative administrative adjustment of approximately 420,000 MT in 4Q2025, compared to a negligible adjustment in the prior quarter.
On the deficit side, total deficits fell by approximately 404,000 MT quarter-over-quarter, driven primarily by lower CARBOB and ULSD volumes. CARBOB deficits decreased by approximately 205,000 MT and ULSD deficits by approximately 200,000 MT. Partially offsetting these decreases, deficits attributable to BD, RD, and renewable gasoline/naphtha pathways rose quarter-over-quarter, reflecting a greater share of volume from pathways with CIs above the 22.75% CI-reduction standard.
Compared to the same quarter a year prior (4Q2024), the fourth quarter 2025 data show a dramatic reversal in the credit-deficit balance. Total credits declined approximately 23% year-over-year, with RD credits down approximately 37%, ethanol credits down approximately 39%, BD credits down approximately 33%, bio-CNG (also known as renewable natural gas or RNG) credits approximately 6%, and SAF credits down approximately 5%, as the more stringent 22.75% CI-reduction standard reduced the per-unit credit value of these fuels relative to the prior year’s 13.75% standard. On-road electricity credits rose approximately 7% year-over-year, partially offsetting these declines. On the deficit side, total deficits rose approximately 65% year-over-year; CARBOB deficits increased approximately 66% and ULSD deficits increased approximately 166% from 4Q2024 levels as ULSD volumes increased YoY with the decrease in RD volumes, again driven by the higher CI-reduction standard.
The largest contributing factor to the changes in credit and deficit generation year-over-year is the 9% step-change in CI-reduction target that became effective July 1, 2025. This more stringent target is reshaping credit and deficit volumes.
We will provide an in-depth analysis of this data in our upcoming quarterly newsletter, to be published on May 7, 2026. 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 net deficit mean for credit prices?
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