Archive for May, 2023

California LCFS – Q4 2022 Report Highlights

Posted May 9th, 2023 by SRECTrade.

The California Air Resources Board (CARB) published quarterly program data for the Low Carbon Fuel Standard (LCFS) on April 28, 2023. In this piece, we will provide some analysis of the new data and highlight interesting trends. 

Credit Bank Growth Slows 

The cumulative credit bank, a measure of net credit generation over the lifetime of the program, grew for a seventh consecutive quarter to reach a new program high of about 15M MT. However, quarter-over-quarter credit growth slowed to 2% while deficits rose by 5%, resulting in a net build of 1.65M MT, slightly lower than last quarter’s build of 1.76M MT and halting a three-quarter trend of growing credit builds.

Source: CARB

Q4 2022 Credit Trends

  • Renewable diesel (RD) rebounded from a rare quarterly decline in Q3, growing by 7% to a new program high of 2.5M MT. RD remains the largest source of credits under the program at 36%.
  • Renewable natural gas (RNG) volumes dropped by about 2% but remains the lowest average carbon intensity (CI) fuel at -119 gCO2e/MJ. Notably, a bill was introduced that would direct CARB to restrict dairy digesters from generating credits under the California program. 
  • Credits from ethanol declined by 5%, while credits from biodiesel and hydrogen both dropped by 4%.

Source: CARB

EV Credit Growth Also Slows

Credits from electric vehicles represented one-quarter of all credits under the program but grew by only 66k MT last quarter, the least since Q4 2021. The distribution of credits across the categories of eligible EVs remains unchanged: residential (49%), eForklifts (23%), and non-residential light/medium-duty (15%). Notably, credits from heavy-duty EVs grew by 10% while credits from electric cargo handling equipment and electric refrigeration units both fell by about 5%. 

Source: CARB