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PRIMA data shows solid August LCFS trade

According to PRIMA data, over 150,000t of LCFS credits changed hands in the California OTC market in August in a price range between $62.75 and $97, almost in line with July volumes as the market stayed bullish on LCFS prices after a huge amount of deficits were unveilved in early August. Prompt transfers still accounted for the bulk of the month’s liquidity, while further forward a small volume of Q1 2017 deals were recorded.

The data contrasts with CARB’s own monthly tally of LCFS credit transfers. CARB announced transactions for a total of 145,000t of credits booked in the CARB system for August, down 27% YoY and 67% MoM. August transfer prices averaged $75, down $17 from July’s average, with transfers completed in a narrower price range of $55 and $118 compared with the previous month.

CARB data records transactions at the time they were reported in CARB’s LRT system, so the log may well include deals booked before August, but which were not transferred through the electronic bank until months after the deals were originally done.

The August passage of California legislative bills SB 32 and AB197 giving greater certainty to the longetivity of the aggressive carbon cutting LCFS program have underpinned a strong subsequent price rally in the pioneering market for transport carbon credits.

HZ/MS – 15/09/2016

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