Flash Report: 2Q2020 LCFS Data Show Slight Draw on the Credit Bank

November 2, 2020

On Friday afternoon, October 30th, CARB posted the second quarter 2020 data for the LCFS program. The 2Q2020 report gives us insight into the credit bank situation for the three months following stay-at-home orders due to COVID-19. In today’s flash report, we offer a quick look at the second quarter data. Our comprehensive analysis will be published in Stillwater’s Quarterly LCFS Newsletter which is scheduled to be published on November 10th.

The second quarter data shows a slight draw on the credit bank of 124,000 metric tons (MT) of credits, a significantly smaller deficit than the 1Q2020 drawdown of 459,000 MT and a decline just half the size of the 2Q2019 drawdown. The second quarter of 2020 reflects the impact of the COVID-19 shutdown as California’s restrictions were imposed in mid-March. With the 2Q2020 net deficit, the credit bank ends the second quarter of 2020 at 7.53 million MT.

The table below summarizes the quarter and compares it to the prior quarter and same quarter last year.

A quick look at this data shows the most significant impact of the COVID lockdowns was the 32% reduction in CARBOB volumes compared to 2Q2019. This decline resulted in a major reduction in deficits for the quarter. Meanwhile, renewable diesel, biodiesel, and renewable natural gas credit generation and volumes held up well. Ethanol and electricity took the expected hit from decreased auto usage as COVID lockdowns were in place. Comparing 2Q2020 total credits and deficits to 2Q2019 shows that declines in deficit generation were nearly matched by declines in credit generation.

We will provide an in-depth analysis of this data in our upcoming quarterly newsletter, published on November 10, 2020. Access to Stillwater’s LCFS Newsletter is only available to subscribers. For more detailed information on LCFS data trends and analysis, be sure to subscribe! Your first two weeks are free, so subscribe today to receive our Quarterly Analysis in your trial period.