LCFS Credit Price Trend

Bottom Line Up Front (BLUF): Credit prices showed a downward trend in August after being buoyed by the July 1, 2025 implementation of the 2024 amendments.

Figure 1. Past Month Daily LCFS Credit Prices (per OPIS)

Table 1. Monthly LCFS Credit Prices & Added Fuel Costs 

Long-Term LCFS Credit Price Trends

BLUF: August credit prices showed a declining trend but the cost of LCFS credits per gallon of fuel remains much higher than observed in recent years due to the implementation of the 2024 Amendments on July 1, 2025.

For 2025 year-to-date, LCFS credit prices have averaged $57.77/MT, reaching a high of $75.50/MT on January 6^th and recording a low of $40.75/MT on June 11^th. For 2024, the annual average price was $60/MT. The maximum credit price (or price cap) for June 1, 2025 through May 31, 2026 is $268.90/MT. Credit price trends for the past two years are displayed in Figure 2 below. The LCFS cost for CARBOB and ULSD displayed includes the cost of the incremental crude provision.

Figure 2. LCFS Credit Price Trends Source: OPIS

Note: Until July 1, 2025 when the 2024 LCFS Amendments (including a 9% step-change in CI reduction schedule) became effective, Stillwater calculated the cost to CARBOB and diesel based on the regulations as written prior to being amended. As such, a sharp increase in the cost per gallon is shown on July 1, 2025

LCFS Credit Trading

BLUF: The number of trades, total volume traded, and average transaction size all decreased month-to-month. The CARB-reported, volume-weighted average transaction price held steady month-to-month.                                                                                            

Table 2 displays the number, volume, and average price of credits as reported in the California Air Resources Board (CARB) LCFS Credit Transfer Activity Report for August 2025.

Table 2. LCFS Credit Trading Reported by CARB

The number of reported transactions decreased by 56%, from 522 in July to 229 in August. The volume of credits decreased by 68%, from 7,538,000 MT in July to 2,404,000 MT reported in August.

The August volume-weighted average price reported by CARB was $58MT, which is 2% higher than the $57/MT average calculated by daily spot price reports. At a price of $58/MT, the credits traded in the month of August amount to nearly $139 million changing hands.

LCFS Credit Trading Price and Volume

BLUF: The total volume of credits traded decreased significantly in August, in keeping with prior year trends.

Figure 3, below, graphically illustrates the monthly average transaction values and volume of credits traded, as reported by CARB, and shows the LCFS credit price reported daily by OPIS. For ease of comparison, the August volumes are highlighted in red.

Figure 3. LCFS Credit Trading Price and Volume Sources: CARB, Stillwater analysis

Renewable Diesel Monthly Supply and PADD 5 Supply & Demand Balances

BLUF: U.S. RD volumes continue to show strong recovery into Q3 after sharp decline in Q1.

RD has become a key credit-generating fuel for the three low carbon fuel (LCF) programs in PADD 5. Illustrating these trends, Figure 4 displays PADD 5 RD supply/demand balances from 2016 by quarter with the latest data for each series.[1] The RD supply quarter-to-date from EPA’s Moderated Transaction System (EMTS) is also included to illustrate that most RD supplied in the U.S. has been directed to PADD 5. The RD supply indicated by EMTS could be considered a leading indicator of the RD that is being used in PADD 5.

The EMTS data available this month show a recovery in RD supply in the second and third quarter of 2025 after a precipitous drop in Q1 due to a sharp decline in waterborne imports with the phase-out of the biomass-based diesel blender’s tax credit (BTC) which was replaced by the Clean Fuels Production Credit (CFPC, also known as 45Z) for which only domestic producers are eligible. We expect to see continued constraints on RD supply as additional 45Z restrictions from the “One Big Beautiful Bill Act” (OBBBA) become effective in 2026. For a summary of these changes to 45Z, see Stillwater’s article on the subject.

Figure 4. West Coast Renewable Diesel Supply & DemandSources: U.S. Energy Information Administration (EIA), EMTS, CARB, DEQ, Washington Department of Ecology, and Stillwater analysis.

Tracking the Stacks – RD, BD, and SAF Values on the West Coast

Stillwater tracks the total value stack – including base fuel value and the added regulatory incentives – for renewable fuels on the U.S. West Coast^[2] to identify the most attractive markets as well as trends in supply and demand for these fuels. For this exercise, we calculate comparative value stacks for renewable diesel (RD), biodiesel (BD), and sustainable aviation fuel (SAF) in four West Coast markets:

1. Los Angeles, representing Southern California
2. The Bay Area, representing Northern California
3. Oregon
4. Washington

These value stacks identify the cost added to fossil fuel (which renewable fuels avoid) and the incentive value of the various programs received by the renewable fuel. We’re using RD, BD, and SAF with a carbon intensity (CI)^[3] of 40 gCO₂e/MJ (or simply g/MJ) as an example.^[4] The prices shown in each chart are based on August 2025 averages.

RD Value Stacks
Bottom Line Up Front: Oregon offered the largest value for RD in August.

The figure below compares the RD value stacks in each of the four West Coast markets using August 2025 average prices.

Figure 5. West Coast Markets 40-CI RD Value Stack Comparison – August 2025Sources: OPIS, Stillwater analysis

Let’s break it down…

1. Spot: Average spot price varies between the markets, with the California markets usually seeing the highest average spot prices. In the last few months, however, the PNW has logged the highest average spot prices on the West Coast. In August, LA had the lowest spot price at $2.36/gallon, the Bay area averaged $2.39/gallon, and Oregon and Washington had the highest at $2.66/gallon.
2. Cap at the Rack (CAR)[5]: In August, Washington had the highest average CAR fee at $0.63/gallon. California’s CAR fee averaged $0.28/gallon. Oregon’s Climate Protection Program (CPP) is similar to the California and Washington programs, but the value of carbon allowances is assessed differently.^[6] Currently we don’t see a cost pass-through at the rack in Oregon due to the CPP, but we will be watching for added costs to fossil fuels in Oregon due to CPP compliance.
3. Fossil Cost (Excluding Logistics): The total cost for the fossil fuel supplier ex logistics is indicated by the black diamond in each of the bars. In August, costs for ULSD suppliers were highest in Washington at $3.31/gallon, while Southern California saw the lowest average price of all four markets at $2.79/gallon due to lower average ULSD spot prices.
4. State Environmental Attribute (EA) Value: The bars also show the value of the EAs for the renewable fuel. California offers an average LCF credit value of $57.32 per metric ton (MT) of carbon dioxide equivalent emissions in August, providing $0.31/gallon incentive for 40 CI RD in both LA and the Bay Area. Oregon’s credit price was the highest, averaging $151.18/MT in August, providing $0.96/gallon incentive for RD. Washington’s CFS credit price is depressed, averaging $27.82/MT in August, providing $0.21/gallon incentive for RD.
5. Federal EA Value: The federal incentives, D4 RINs and 45Z tax incentive, offer the same value across state markets. D4 RINs provide the highest value incentive in the entire stack. The average D4 RIN price in August was $1.15/gallon. Because RD earns 1.7 D4 RINs per gallon, our sample 40 CI RD received $1.96/gallon in value. The estimated 45Z tax incentive value for 40 CI RD^[7] is $0.17/gallon.

Comparing BD Value Stacks

Bottom Line Up Front: Oregon also offered the largest total value for BD in August.

The figure below compares the BD value stacks in each of the four West Coast markets using August 2025 average prices in the same way as RD was portrayed above.

Figure 6. West Coast Markets 40-CI BD Value Stack Comparison – August 2025Sources: OPIS, Stillwater analysis

Let’s break it down…

1. Fossil Cost (Excluding Logistics): The fossil cost for BD is equivalent to that of RD, as both are derived from ULSD market pricing data.
2. EA Value: The EAs for BD are less valuable than those for RD due to the differences in energy density and production emissions between the two fuels^[8] and the higher equivalency value of RD than BD under the RFS. In August, Oregon shows the highest credit price, averaging $0.97/gallon (compared to $0.96/gallon for RD), California averages $0.35/gallon ($0.31/gallon for RD), and Washington averages $0.21/gallon ($0.21/gallon for RD). Most BD earns 1.5 D4 RINs/gal.

Comparing SAF Value Stacks
Bottom Line Up Front: Oregon maintains a strong lead on SAF value stack for August.

The value stacks for SAF offer less value than those correlating to RD and BD while SAF is more costly to produce. (As such, we do not expect to see significant growth in SAF supply without additional incentives.)

The figure below compares the SAF value stacks in each of the four West Coast markets using August 2025 average prices.

Note: Washington State’s SAF tax incentive, established in 2023 under Senate Bill 5447, provides a $1-per-gallon tax credit for SAF with at least 50% lower lifecycle greenhouse gas emissions than conventional jet fuel, with an additional $0.02 per gallon for each percentage point of further emissions reduction, capped at $2 per gallon. The credit can only be claimed after the state verifies that facilities in Washington have a collective production capacity of at least 20 million gallons per year. To date, this condition has not been met, so this incentive is not included in Washington’s value stack at this time.

Figure 7. West Coast Markets 40-CI SAF Value Stack Comparison – August 2025Sources: OPIS, Stillwater analysis

1. Fossil Cost (Excluding Logistics): Oregon and Washington both saw the highest average spot price for fossil jet fuel in August at $2.39/gallon. The cost to fuel suppliers for petroleum jet fuel only includes the average spot price. There is no added cost due to LCF deficits or cap at the rack fees as jet fuel is not obligated under these programs.
2. EA Value: The EAs for SAF are less valuable than those for RD due to the differences in energy density between the two fuels and the fact that there are no CAR or LCF deficit costs for jet fuel.^[9] The average California LCFS credit price in August provided $0.35/gallon incentive for SAF (compared to a $0.31/gallon incentive for RD). Oregon’s CFP value provides $0.91/gallon for SAF (compared to $0.96/gallon for RD). And Washington’s very low CFS credit price provides only $0.17/gallon (compared to $0.21/gallon for RD). Through 2024, no SAF volumes have been reported in Oregon or Washington LCF program data, but Delta Air Lines reported delivery of SAF into Portland International Airport in September 2025, indicating that SAF flows may be shifting in response to high incentive values in the PNW. In contrast, California’s supply of SAF has grown from 1.9 million gallons starting in 2019 to 91.9 million gallons in 2024. Most SAF earns 1.6 D4 RINs/gal.

Takeaways
The total value of renewable fuels on the U.S. West Coast varies over time depending on the spot market for the displaced petroleum-based fuel and state and federal incentive values. For August, Oregon offered the largest value for RD, BD, and SAF. Importantly, these stacks are theoretical; how well market participants can realize this value depends on additional considerations including logistics costs, infrastructure constraints, credit liquidity in each market, and extent of participation in the fuel value chain. We will continue to track these value trends each month and will report in this space.

What will these stacks look like in the future?
One key to understanding the future value of renewable fuels and selecting the most advantaged market is to assess likely LCF credit prices. Stillwater has developed credit price outlooks for all jurisdictions governed by LCF programs incorporating our deep knowledge of the regulations and market trends. Using these outlooks, you’ll gain an informed perspective on how the value stacks will shape up over the next ten years.  

Make smarter market decisions!
Contact us to learn more!

ZEV Adoption Trends

Zero-emission vehicle (ZEV) adoption will be a key indicator of LCFS program success going forward. And a leading indicator of progress toward significant ZEV displacement of conventional vehicles is ZEV sales as a percent of total light-duty vehicle (LDV) and medium-duty vehicle (MDV) sales. The following charts illustrate ZEV – battery electric vehicle (BEV), plug-in hybrid electric vehicle (PHEV), and fuel cell EVs combined – sales as a percent of total vehicle sales in California, Oregon, Washington and the U.S. We include Oregon, Washington and the U.S. to give context to the California sales.

As shown in Figure 8, the ZEV sales as a percentage of total vehicle sales in California grew until mid-2023 then hovered around 25% until falling off in 2025. U.S. sales of BEVs and PHEVs followed the same trend as California. The Oregon and Washington values have much more scatter, but the growth trend in the Pacific Northwest has continued into 2025.

Figure 8. ZEV Sales as Percent of LDV Sales (U.S., California, Oregon & Washington)

Note: Oregon DEQ did not post data for May, June, or July 2025 in its latest release. Additionally, the data released by DEQ in August differ significantly from those published previously. We have contacted DEQ for clarification and will continue to monitor for updates. Subscribers will be notified as new information becomes available.

Figure 9, below, displays trends for U.S. sales of BEV, PHEV, and conventional hybrid vehicles  as stacked areas. Of interest is that the BEV and PHEV total leveled off in the last half of 2023 while hybrid growth has continued unabated. Although not a ZEV technology, we include hybrids in the figure below to show their growing and wide-spread deployment which significantly reduces gasoline consumption without requiring changes in consumer behavior, installation of chargers, or other significant adoption hurdles.

Figure 9. Alternate Technology Sales as Percent of LDV Sales (BEV, PHEV, and Hybrid)

Highlight Analysis: ICE Launches Market for Trading Physical LCFS Credits

Achieving stable revenues to support project investment has been one of the most significant challenges to economic viability for projects reliant on state carbon programs and the federal renewable fuel standard (RFS). In addition to having to cope with recent changes to federal tax incentives, the volatility in the RFS program’s credit (RINs) prices and state carbon programs such as California’s low carbon fuel standard (LCFS) have made life difficult for project developers and owners as well as refiners and fuel marketers. Intercontinental Exchange, Inc. (ICE) recently launched a suite of products that can be helpful to market participants who need to manage physical RFS and state carbon market exposure. Industry participants should consider becoming familiar with ICE’s offerings.

Stillwater reached out to ICE to learn more about their RINs and LCFS products and connected with Michael Repaci, director of U.S. refined products, wet freight, RINs and LCFS to discuss how interested parties can utilize these offerings.

ICE Background
ICE is a data and technology company that operates global derivatives exchanges, including the largest markets to trade and clear energy and environmental products. ICE has been offering financial derivatives contracts (options and futures) for LCFS and RINs products for about five years. During February 2025, ICE launched physically delivered contracts across California, Washington, Oregon and British Columbia’s carbon programs as well as physically delivered RFS program’s D3, D4, D5 and D6 RIN contracts. Upon expiry of a financially settled futures contract, the counterparties settle with a payment equal to the forward price less the reported OPIS price on the expiry date applied to the number of units sold as described below. The seller either makes a payment or receives a payment based on the price difference. Under a physically delivered futures contract, the selling party delivers the number of units sold to the buyer’s settlement account, and the purchaser’s bank account is charged for the price. ICE receives a transaction fee.

ICE operates a futures market for LCFS and RINs products, not a spot market.

Market Progress
ICE reports strong interest in its alternative fuel products. For example, on September 8th^th ICE reported 152,010 lots of open interest (OI) in its LCFS products across financially and physically settled products. One lot is equal to 100 LCFS credits, and OI represents the total number of open or ‘active’ contracts at the end of each trading day, a key measure of market liquidity. When a buyer and seller execute a contract, the closing price, number of lots, and expiry date are listed on the exchange, and the contract is considered open until it is settled or cancelled. Therefore, the September 8th^th LCFS OI represents 15.2 million metric tons (MT) of LCFS credits. While not directly comparable due to the different time periods, CARB reported 2.4 million MT of LCFS transactions in August.

ICE’s total LCFS volume exceeded 26 million MT in 2024, and daily volume is currently running at 124% of 2024’s volume. As for RINs volumes, ICE cleared 10.7 billion RINs in 2024 with current daily volumes exceeding 2024 by 66%.

Market Participants
ICE’s customer base is composed of all types of businesses from commercial to financial participants including obligated parties and parties desiring to hedge their exposures. Most of the LCFS contract tenors[10] do not extend out for many years – currently the longest dated contracts mature in December 2027. Transacting on ICE provides multiple benefits to market participants including price discovery, anonymity, reduction of counterparty risk, and standardized contract terms.

How to Participate
For parties desiring to transact, getting started is relatively easy. Customers need to establish an account with a futures commission merchant also called a clearing member (FCM). FCMs are typically banks and are analogous to brokerage firms one would use to hold and trade stocks. Most companies will likely have an existing banking relationship with an FCM. The FCM is responsible for conducting the know-your-customer analysis, establishing ICE customer trading limits, and assuming the credit risk for the customer’s ICE transactions. ICE customers must also establish an account with ICE to view live data and begin trading.

ICE offers its product lines in groupings. For example, a single fee provides access to a universe of carbon market products – California, Washington, Oregon and BC carbon programs and the federal RFS program. Customers that desire to make physical deliveries will also need to connect ICE with their accounts at the state and federal regulatory agencies – for example, the LCFS Reporting Tool and Credit Bank & Transfer System (LRT-CBTS) for CARB.

Beginning with our September 24, 2025 edition of Stillwater’s LCFS Weekly Newsletter, we will publish the daily closing prices for the prior week’s ICE futures contracts. For example, on September 15^th the LCFS contracts (both physical and cash settled) to be delivered in December 2026 closed at $61.00 with a total volume of 130 lots transacted. Stay tuned for this update to our weekly LCFS reporting.

ICE has established many other futures products that may be of interest to Stillwater subscribers across oil, refined product and alternative fuel markets. Examples include most petroleum products, ethanol, sustainable aviation fuel, used cooking oil, biodiesel, and agricultural feedstocks such as soybeans and corn.

For readers interested in learning more about ICE’s carbon market products, Michael’s email is [email protected].

[1] Due to changes in reporting methodologies for PADD-specific RD production and supply, these data are shown in different ways in Figure 4. Up to 2021, this is represented as implied PADD 5 production, rail movements, and inventory changes shown by the light orange bar. From 2022 to 2023, this is represented as implied PADD 5 production, inventory changes, and other supply shown by the dark orange bar. Beginning in 2024, with the start of actual PADD 5 RD production reporting, this data is shown as the green bar. The period of data for the various sources is shown in the text box.

[2] The U.S. West Coast has the greatest demand for lower carbon renewable fuels because of the low carbon fuel programs in each state.

[3] Carbon intensity (CI) is the measure of greenhouse gas (GHG) emissions associated with producing and consuming a transportation fuel. It’s measured in grams of carbon dioxide equivalent per megajoule of energy (gCO₂e/MJ).

[4] We chose 40 g/MJ CI because it is in the middle range of CI scores for RD and SAF and represents fuels produced using tallow or distillers corn oil (DCO) feedstocks. Fuels with lower CI scores, generally produced from waste feedstocks like used cooking oil (UCO) will have a larger value stack. Fuels with higher CI scores, generally produced from vegetable oils like soybean oil (SBO) will have a smaller value stack.

[5] California’s Cap-and-Trade (C&T) and Washington’s Cap & Invest (C&I) programs cap greenhouse gas (GHG) emissions on fuel producers and industry, establishing an auction for obligated parties to trade and purchase carbon allowances to offset their obligation. Under these programs, the obligation for carbon allowances is levied on the fuel position holder at the terminal where the fossil fuel is loaded. This cost added to the fuel is known as the Cap at the Rack fee (CAR). CAR is calculated directly from emissions factors published in the EPA’s Mandatory GHG Reporting Regulation and multiplied by the average reported allowance price. This adds cost to the fossil fuel which is not incurred by the renewable alternative fuel.

[6] The Oregon CPP caps GHG emissions on regulated industries including fuel suppliers. However, Oregon’s program does not establish an auction for carbon allowances. The state provides free compliance instruments to obligated parties equal to the emissions cap. Obligated parties can bank compliance instruments if they emit less than the number of compliance instruments they receive, trade compliance instruments with other obligated parties, or earn additional credits by contributing funds to approved entities through the Community Climate Investments (CCI) program. Oregon’s program was paused in 2024 due to litigation which is now resolved.

[7] The 45Z tax incentive measures the CI for fuels in kilograms of carbon dioxide equivalent (CO2e) per million British thermal units (mmBTU), kgCO2e/mmBTU or kg/mmBTU. LCF programs measure CI in grams of CO2e per megajoule of energy, gCO2e/MJ or g/MJ. For this analysis Stillwater has converted LCF value for 40 CI g/MJ to kg/mmBTU. 1 kg/mmBTU = g/MJ ÷ 0.9483. 40 g/MJ CI = 42.18 kg/mmBTU. 45Z CIs for specific fuels from specific feedstocks are determined by using the 45ZCF-GREET model; calculation of the value stack for a specific fuel should be based on the CI calculated by that model.

[8] RD energy density is 129.65 megajoules per gallon (MJ/gal). BD energy density is 126.13 MJ/gal.

[9] RD energy density is 129.65 megajoules per gallon (MJ/gal). SAF energy density is 126.37 MJ/gal.

[10] Editor’s Note: The term “tenor,” when used in relation to financial products, refers to the length of time remaining before the contract expires. It is sometimes used interchangeably with the term maturity, although the terms have distinct meanings.