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LCFS regains upward track

Activity in California’s LCFS credit market slowed on Wednesday, leaving prices to settle at $97.50, marginally up from the previous trading session. Sellers’ indications stayed in the low-$100s while the buy side edged higher, adding 50 cents to assessed value. So far this week almost 30 kt of trades have been confirmed done for Q4 transfer near the highest levels seen under the LCFS program, highlighting intensifying market awareness of California’s increasingly ambitious carbon cutting regime.

EIA released its monthly energy outlook yesterday, cutting forecast 2015 biodiesel production by 1,000 b/d to 91,000 b/d in 2015, although the consumption of biodiesel nationwide is expected to stay strong through the end of year. Biodisel consumption in October went up by 33% MoM to 0.024 quadrilion btu, EIA said, with November’s consumption estimated to remain in line. Imports of biodiesel are forecast at 26,000b/d for this year, up 3,000b/d from the October forecast. EIA is expecting ethanol to average a 9.9% share of the total gasoline pool for this year. Last year, ethanol consumption in California reached 9.69% of total gasoline production.

YtD through October, 4.38 mn t of LCFS credits have been reported transferred in total, according to CARB. The volume excludes transfers that were proposed but were still pending buyer’s confirmation in the LRT-CBTS.

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