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LCFS ends record-breaking week on a lower note

California LCFS credits traded twice at $97 and $98 on Friday after offers softened from the morning’s $105 open to meet high-$90s bids,  leading mid-market closing value marginally below the week’s earlier record breaking gains. In total more than 5000t of credits changed hands on Friday alone, bringing the total confirmed trading volume this week to almost 25,000t. PRIMA’s LCFS Index finished Friday at $97.50, bring the week’s average mid-market value to $96.50, up $12.70 or 15% WoW.

California instate biodiesel supply is likely to remain strong in the short-term as the state’s plant utilization rate maintains high levels against the expanded installed capacity footprint. Available capacity rose to 100mn gal/yr in October, up 42mn gal from July as the number of operational plants jumped from six to 11. Instate production is in any case finding favor in anticipation of EPA’s end-November deadline for finalizing its RVO mandates against a backdrop of dwindling import discussions for remaining 2015 dates. In September, Argentinian biodiesel was absent from California’s ports, leaving total foreign imports of biodiesel sitting at 1.92 mn gal for the month. All the volume originated in Korea, but remained well below the 9.48mn gal of foreign originated biodiesel shipped into California in August.

CARB’s Friday workshop confirmed that CI values for petroleum fuel will become effective from January 1, 2016. From then, CaRFG CI value will decrease marginally from 98.95 to 98.47, while diesel CIs will rise markedly from 98.03 to 102.01. The deadline for filing individual fuel CI pathway re-certification applications is January 31 2016 to ensure certification by the end of next year, although CARB will try to re-certify ethanol pathways by March 31.

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