Flash Report: 3Q2019 LCFS Data Show a Continued Slowing Trend in Net Deficits

February 3, 2020

On January 31st, 2020 CARB posted the third quarter of 2019 data for the LCFS program. In today’s flash report, we offer a quick look at the third-quarter data. Our comprehensive analysis will be published in Stillwater’s Quarterly LCFS Newsletter which is scheduled to be published on February 14th.

The third-quarter data shows a slowing of the quarterly net deficit position as 2019 progressed from 457,000 MT and 249,000 MT deficits in quarters one and two, respectively, to a 149,000 MT deficit in the third quarter. If the 4Q2019 net deficit matches that of 3Q2019, the total bank draw will be about one million MT for the year, resulting in a year-end net credit bank of 7.8 million MT.

The table below summarizes the third quarter and compares year-to-year and quarter-to-quarter data.

A quick look at this data shows a reduction in CARBOB deficits and increases in credits for renewable natural gas (RNG), on-road electricity, electricity incremental credits, off-road electricity, and ethanol. Ethanol credits were up in spite of lower volumes as the average CI decreased to 59.33 gCO2e/MJ as sugar cane ethanol rose to 20% of the ethanol volume. For the prior six quarters, sugar cane ethanol averaged just 5% of total ethanol volume. RNG and biodiesel CIs also declined in the third quarter, contributing to increased credits from those fuels. Offsetting these factors was a sizeable reduction in credits as a result of a 16.9% drop in renewable diesel volume from the previous quarter. Renewable naphtha, alternative jet fuel, and propane offer small contributions as credit-generating fuels. Note: Credits from some projects lag several quarters; as such, the project category totals may be understated.

We will provide an in-depth analysis of this data in our upcoming quarterly newsletter, published on February 14, 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.