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LCFS credits consolidate stand above $80

PRIMA’s California LCFS Index climbed by 50 cents on Wednesday as the market consolidated the previous session’s gains. After trading at $80 on Tuesday for Q4 transfer bids were shown at the same level Wednesday for small volume, with sellers sticking to $81.50 at the margin for Q4 transfer and at $85 for Q1 transfer.

LCFS liquidity dipped in September, according to CARB’s monthly market report, with credit transfers down 20% MoM to 40 transactions in total. The overall volume traded however rose MoM to 224,000t, up 12% from August. September prices averaged $64, a gain of 15.9% MoM. The highest September trade went through at $72, $5 above the August high, CARB said.

US biodiesel producer Renewable Energy (REG) Wednesday announced it expects to report a net loss of $9-$15 million for Q3, although the firm stands to benefit from a net boost to its bottom line of between $35-40mn if the biodiesel blenders’ tax credit is retroactively reinstated. Some LCFS market participants expect reinstatement of the credit to act as a support to California credit prices as improved blending economics nationwide sap the attractiveness of the arbitrage into California, robbing the California market of one of its main sources of low-CI blend stock.

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