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PRIMA LCFS Index ends week on a high

PRIMA’s California LCFS Index finished Friday with a weekly gain of $7 as mid-market values eased up to $76.5. Index prices this week have averaged $75, up from September’s average price of $66.90, as the market responded strongly to CARB’s reconfirmation of deepening LCFS compliance requirements through 2020.

Propel’s Thursday announcement of a wider California rollout for high performance renewable diesel sourced from Neste should widen distribution of the fuel registered for LCFS under Neste’s CI pathway for corn oil, used cooking oil, tallow and fish oil feedstocks. CI values for these feedstocks range between 16.21 gCO2e/Mj and 49 gCO2e/Mj, generating LCFS ticket premiums worth between 43 cents and 74.93 cents at current credit price level.

Ethanol producer Aemetis meanwhile harvested a 20 acre trial biomass sorghum ethanol crop grown using poor quality water in a low water allocation area of the San Joaquin Valley. The second quarter LCFS trading report indicated 955.79 gallons of sorghum ethanol were needed to generate one LCFS credit, compared with the 84 gallons of corn oil biodiesel or 780 gallons of corn ethanol needed to achieve the same result. D5/D6 RIN spreads lingered around 10 cents/gal on Friday meanwhile, with higher Brazilian ethanol and Argentinian biodiesel prices restricting arbitrage opportunities into the US.

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