The California LCFS market saw another day of limited liquidity, with offers and bids keeping almost entirely faithful to the previous session’s range, leaving PRIMA’s California LCFS Index to finish the day marginally firmer at $80. Offer prices sat near $81 for Q4 transfer, while the Q1 offer walked down to $83. Some large market participants indicated bids early in the afternoon, although levels were kept to between $76 and $79.
Some fuel companies are likely to remain market bystanders until Thanksgiving or even the New Year after banking sufficient credits for immediate compliance. But the prospect of CARB’s Nov 6 meeting could provide an earlier liquidity trigger given expectations that CARB will then unveil detailed CI values for individual feedstock and fuel pathways.
Soybean lobby group United Soybean Organization on Tuesday applauded the support which it expects strong LCFS prices to offer to soybean prices through increased demand or low CI biodiesel. Don Scott, the director of sustainability for NBB, said farmers will benefit from increased demand for soybean biodiesel given the reduced indirect land use rating written into the revised scheme’s methodology. CARB’s models assume its new methodology will consume 97mn gal of biodiesel for credit generation, rising to 129mn gal next year.