The California Air Resources Board (CARB) published quarterly program data for the Low Carbon Fuel Standard (LCFS) on January 31, 2023. In this piece, we will provide some analysis of the new data and highlight interesting trends. 

But First: What is the Credit Bank and Why is it Growing?

Each quarter, CARB issues credits and deficits based on the carbon intensity (CI) and volume of fuel reporting under the program. The cumulative credit bank, a measure of net credit generation over the lifetime of the program, is often used as a proxy for credit supply and demand. This credit bank grew for the first few years of the program, reaching about 10M MT by the end of 2016. From 2017 through the first half of 2021, the credit bank remained largely stable as quarterly net gains were balanced by quarterly net reductions. However, the credit bank has increased significantly since then, reaching about 13.5M MT according to the latest data.

The immediate reasoning behind the growing bank is simple:

1. An increase in the production and use of low carbon fuel, which creates credits
2. A simultaneous decrease in the use of gasoline and diesel, which creates deficits

The forces behind these trends are much more complex, but the LCFS is itself one of those forces. For example, the production of renewable diesel (RD) is incentivized by LCFS and now makes up almost 40% of the diesel fuel reported in the program. RD displaces the use of conventional diesel which would otherwise create deficits. As more RD is produced, more credits and fewer deficits will be generated each quarter. And RD happens to be the single largest source of credits in the program, making up about ⅓ of all credits last quarter.

Of course, RD is not the only fuel generating credits and contributing to the growing credit bank…

Q3 2022 Credit Trends

• The largest quarter-over-quarter increases came from renewable natural gas (10%), ethanol (6%), and electricity (6%).
• RD declined slightly (-3%) for the first time since 2020
• The primary driver of credit growth from renewable natural gas (RNG), the third largest credit source in the program, has been declining average CI. While RNG volume is only 7% up from the same quarter last year, the average CI is now -111 gCO2e/MJ compared to -60 last year. The lower the CI of a fuel, the greater number of credits it will generate.

Spotlight on EV Credits

Credits from electric vehicles continue to be a major source of growth in LCFS, reaching a record share of credits generated Q3 2022 (24%). Consistent with previous quarters, almost 90% of credits from EV charging came from just three categories: residential (49%), eForklifts (23%), and non-residential light/medium-duty (15%).

CARB is expected to release Q4 2022 data by April 28, 2023.  

SRECTrade Pays Fleets under Canada’s Clean Fuel Regulations for Owning and Operating Electric Equipment.

SAN FRANCISCO, CA — SRECTrade, the single partner to manage and transact environmental commodities, announced that it has expanded its management and transaction services to Canada. With these services, SRECTrade and parent company Xpansiv, the premier global market-infrastructure platform for environmental commodities, generate and monetize clean fuel credits to fund budgets to help cover the cost of deploying and operating zero emission vehicles.

In June 2022, Canada launched the Clean Fuel Regulations (CFR), requiring a reduction in the carbon intensity (CI) of transportation fuels by 15% by 2030. This fuel agnostic program provides valuable incentives for transitioning to and operating clean fleets, including EV charging stations, electric and hydrogen buses, trucks and other equipment. The CFR shares many similarities with clean fuel programs across the United States including the California Low Carbon Fuel Standard (LCFS) and Oregon Clean Fuel Program (CFP). To learn more about participating in the Canada CFR, register for SRECTrade’s webinar on January 31 at 10 am PST.

SRECTrade is already serving Canadian companies and multinationals broadening their participation in clean fuel programs. As the largest agent manager of electric vehicle charging and renewable energy assets across North America, the firm’s expansion into Canada solidifies SRECTrade’s continued leadership in the space, providing clients equitable access to clean fuel and renewable energy programs wherever they exist.

“Organizations that act quickly to meet registration deadlines will be among the first to start generating credits this year,” says Steven Eisenberg, Xpansiv’s President of Managed Solutions. Under Canada CFR, there is no retroactive credit generation so the best time to get started is now. To learn more, contact cleanfuels@srectrade.com.

About SRECTrade

SRECTrade is the single partner to source, manage, and transact environmental commodities globally. Founded in 2008, SRECTrade is the largest agent manager of electric (EV) and renewable energy assets across the U.S. With a 99% annual client retention rate, the firm has generated almost a billion dollars in value across more than 64,000 clients while managing over 185,000 clean energy assets on its technology platform. SRECTrade partners with commercial and public entities across a variety of market segments including manufacturing, freight and logistics, warehouse and distribution, maritime, EV charging networks, transit fleets, municipalities, universities, property management companies and others. SRECTrade is a wholly owned subsidiary of Xpansiv, the premier market-based infrastructure platform for environmental commodities.

For information concerning this release, please contact:

SRECTrade
cleanfuels@srectrade.com

Check out our November 2022 Clean Fuels Market Update for the latest news on clean fuel programs across North America. Highlights from this edition include: 

• SRECTrade begins registrations for Canada’s new Clean Fuel Regulations (CFR)
• CARB holds workshops to discuss significant changes to the LCFS program 
• Oregon adopts stricter CFP targets

Contact SRECTrade at cleanfuels@srectrade.com to start getting paid for the clean equipment you already own and operate.

Check out our August 2022 Clean Fuels Market Update for recent updates on clean fuel programs, pricing trends, regulatory news, grant programs, and more. Highlights from this edition include: 

• Canada launched a new clean fuel program! The early registration deadline is August 20.
• The CA LCFS market continues to be very active, with over 3.5 million credits transferred in July alone, the third-busiest month of the program.
• CARB’s workshop on July 7 provided several key insights into the future of LCFS.

Contact SRECTrade at cleanfuels@srectrade.com to start getting paid for the clean equipment you already own and operate.

Download the May 2022 Clean Fuels Market Update to learn about the latest information on clean fuel programs, pricing trends, policy updates, grant programs, and related news. Highlights from this edition include: 

• On March 21, the Securities and Exchange Commision (SEC) proposed a rule change that would require public companies to disclose information about how they are measuring and managing climate risks.

• The California LCFS market saw an increase in the credit bank of nearly 971k credits, the largest ever quarter over quarter increase.

• Get the newest version of the SRECTrade LCFS Calculator app to estimate credit values through Oregon’s Clean Fuels Program (CFP) and California’s Low Carbon Fuel Standard (LCFS) program.

Contact SRECTrade at cleanfuels@srectrade.com or (415) 763-7732 to start getting paid for your clean fuel assets.

The February 2022 Clean Fuels Market Update covers the latest information on clean fuel programs, pricing trends, policy updates, grant programs, and related news. Highlights from this edition include: 

• The California LCFS market saw an increase in the credit bank of nearly 433k credits, its largest credit increase since 2016
• The Oregon Clean Fuels Program (CFP) pricing for Q4 2021 remained steady at approximately $125 per credit
• New Mexico continues efforts to enact a Clean Fuel Standard

Contact SRECTrade at cleanfuels@srectrade.com or (415) 763-7732 to start generating revenue from your clean fuel assets.

The November 2021 Clean Fuels Market Update covers everything you need to know about clean fuel programs across North America. Highlights from our newsletter include: 

• Q2 2021 saw a significant increase in California LCFS credits and deficits generated, with credits oupacing deficits
• The Oregon Clean Fuels Program (CFP) pricing for Q3 2021 remained steady at approximately $125 per credit
• The House passed the $1.2 trillion infrastructure bill with $7.5 billion for EV infrastructure
• SRECTrade, Inc. has joined Xpansiv Ltd. to lead the transition to a low-carbon future

Contact SRECTrade at cleanfuels@srectrade.com or (415) 763-7732 to start generating revenue from your clean fuel assets.

SRECTrade’s turnkey solution helps fund Lazer Spot’s continued deployment and operation of zero-emission yard trucks using renewably generated electricity

ALPHARETTA, GA and SAN FRANCISCO, CA, October 6, 2021 – Today Lazer Spot announced its partnership with SRECTrade to advise and manage the company’s environmental commodities as part of further accelerating Lazer Spot’s long-time drive to reduce vehicle emissions. As the leader in the spotting industry Lazer Spot has reduced emissions for years, operating 100% electric yard trucks since 2017. Informed by these early trials, Lazer Spot has accelerated the deployment of 100% electric yard trucks aided by SRECTrade’s work to optimize funding provided by environmental commodity programs like California’s Low Carbon Fuel Standard (LCFS).

Lazer Spot has led the reduction of vehicle emissions since 2015 with an Idle Reduction Initiative that improved the overall health of its fleet, saved on fuel and reduced emissions. The company now is ahead of the standard industry idle time by almost 30%, saving over 1.5 million gallons of fuel and eliminating over 32 million pounds of CO2 emissions. Two years into this initiative Lazer Spot began deploying its first all-electric yard trucks and is now more aggressively transitioning its fleet while successfully balancing the benefits against higher initial deployment costs.  

SRECTrade’s ability to source renewably generated electricity to power electric trucks is a key part of Lazer Spot’s sustainability strategy. “We wanted a turnkey solution from a partner that could help educate, advise and operationalize these tough new regulatory programs,” said David Stringer, Vice President of Innovation at Lazer Spot. “We also recognized that with our scale, we must leverage every resource to make the tech more affordable, approachable and ultimately more sustainable for our customers and the communities in which we operate – the very same communities in which we live.”

Stringer noted that the transition to EVs has been cost effective and beneficial in many ways. The zero-emission vehicles have led to more efficient workdays, safer working conditions, and greater employee retention. Stringer reflects on Lazer Spot’s transition to renewable energy, saying, “there doesn’t have to be a compromise.” It’s a win for everyone: employees, customers, the environment…and the bottom-line.

SRECTrade advises on and manages Lazer Spot’s environmental commodity portfolio maximizing benefits from complex clean fuel and renewable energy programs – both financial and strategic – as the firm accelerates efforts to decarbonize across its network. Lazer Spot plans to deploy over 30 trucks by the end of 2021 with a goal to get to 100 trucks in 2022.

About Lazer Spot

Lazer Spot is the leading provider of yard management in North America, working at 400+ sites in the USA and Canada for leading manufacturers and retailers. Our task is to move trailers safely and reliably around the yards of our customers’ production plants and distribution centers or between those and outside trailer yards to ensure that each trailer arrives and leaves the correct dock door on a just in time basis. Our name is because we are Lazer focused on customer satisfaction, reliability and safety.

About SRECTrade, Inc.

SRECTrade provides trusted advice, management services, and technology to fund budgets and accelerate deployment of clean transportation and renewable energy assets managing credit generation, sale, and payment under complex regulatory programs. SRECTrade is the largest agent manager of EV assets for the California Low Carbon Fuel Standard (LCFS) and has earned an annual client retention greater than 99% with more than 54,000 unique assets under management and more than 175,000 clean energy assets managed on its technology platform. With presence across 14 regulated markets and 20 tradable products in North America, SRECTrade provides a single partner to accelerate adoption of clean energy and clean transportation equipment and minimizing the time, cost, and risk associated with environmental commodity programs.

The press release can also be found HERE.

The August 2021 Clean Fuels Market Update covers everything you need to know about clean fuel programs across North America. Highlights from our newsletter include: 

• Q12021 saw an increase in deficits generated compared to credits issued
• DC Fast Charging Infrastructure (FCI) credit issuance doubled in Q12021 
• SRECTrade now offers renewable energy sourcing in the Oregon CFP
• EV Charging approved to generate credits in British Columbia starting 2022

Reach out to SRECTrade at cleanfuels@srectrade.com or (415) 763-7732 Ext. 4 to start generating revenue from your clean fuel assets.