In This Newsletter
1. Feature : CA LCFS Credit Prices Drop Amidst Rising Credit Bank Fuelled by Renewable Diesel
2. Daily Price Change
3. Carbon & Clean Fuel Market News
4. Upcoming Webinars
5. Latest Insights

This Week’s Highlights:

• The latest quarterly report on credit generation reveals a consistent increase, resulting in a substantial accumulation of 23.34M credits in the bank. CARB is contemplating adjustments to near-term targets to manage the surplus, yet persistent regulatory uncertainty is driving credit prices downward.
• A total of 279,200 credits were exchanged as the Type 1 trades, a 2x increase week-over-week (WoW) and all non-zero trades also increased by 77.85% as 1,085,423 credits were traded in CA LCFS.
• The average LCFS spot credit price dropped by 3.55% WoW to reach $59.23/MT last week, also on 7th May the average LCFS spot price was $50.75/MT.
• The weekly average CA LCFS credit price was $59.23/MT for Type 1 transfers, a decline of 3.55% from the past week, while All Non-Zero transfers decreased by 5.13% in prices.
• In the RFS market, all D3, D4, D5 and D6 RIN prices declined.

On Wednesday, there was a decrease of $0.25 in CCA prices, an increase of 0.05 in RGGI prices, and a decrease of $4.75 in LCFS prices.

Cap-and-Trade

(SaskPower)

SaskPower has outlined its extensive plans for a $1.6 billion capital investment into the province’s electricity system in 2024-25:
1) $508 million goes to  maintaining and upgrade transmission, distribution and generation assets, including their existing natural gas and hydroelectric generation fleets and rebuilding rural power lines.
2) $710 million on new generation including the Aspen Power Station Project near Lanigan that broke ground a few weeks ago, as well as the expansion of natural gas power stations at Ermine near Kerrobert and Yellowhead near North Battleford;
3) $311 million in growth projects, including connecting new customers to the grid;
4) $67 million in strategic investments to continue with projects like the Smart Meter deployment, and work on projects such as the new Regina Operations and Maintenance Complex.

SaskPower is also set to commission the Great Plains Power Station near Moose Jaw in 2024, and start operating the province’s first battery energy storage system near Regina. They are also adding 200 megawatts of renewable energy capacity from the Bekevar Wind Energy Project near Kipling.

(UK Government)

UK will build first high-tech nuclear fuel facility in Europe to power future nuclear reactors - helping to isolate Russia from global energy markets, boost British energy security and provide reliable, affordable energy. The high-assay low enriched uranium (HALEU) will power the UK’s future civil nuclear power stations. The government is awarding £196 million to Urenco to build a uranium enrichment facility. This will produce fuel by 2031 that would be ready to export or use domestically, and could power UK homes in the next decade. Urenco’s facility will have the capacity to produce up to 10 tonnes of HALEU per year by 2031. When fabricated into fuel, 10 tonnes of HALEU could contain as much energy as over one million tons of coal. On the other hand, UK also announced competition for up to £600 million in contracts to build the world’s first commercially viable fusion power station prototype. 

(UK Government)

The UK government has launched a call for evidence for innovative new options for transporting CO2, on top of the existing network of pipelines, supporting industry on the path to net zero. The UK has a distinctive geology and the capacity to store up to 20-30 million tonnes of CO2 annually by 2030 and the government is championing this industry with a significant investment of up to £20 billion – one of the biggest in Europe.  The UK is expected to start supporting the development of carbon capture projects that would use non-pipeline transport methods from 2025 onwards, predicting "millions of tonnes of captured emissions" could eventually be transported via road, rail, barge, or ship. The call for evidence, which is set to run for 10 weeks, is seeking industry views on innovative new options for transporting carbon dioxide, on top of the existing network of pipelines.

Clean Fuel Standards

(Singapore Airlines)

The Singapore Airlines (SIA) Group has signed an agreement with Neste to purchase 1,000 tonnes of neat Neste MY Sustainable Aviation Fuelexternal-icon-imageTM. This will make SIA and Scoot, the two airlines in the Group, the first carriers to receive Sustainable Aviation Fuel (SAF), produced at Neste’s refinery in the country, at Singapore Changi Airport. Neste will blend the SAF with conventional jet fuel according to the required safety specifications1 , and deliver the blended jet fuel to Changi Airport’s fuel hydrant system in two batches – once in the second quarter of 2024 and once in the fourth quarter of this year.

(US Treasury Inspector General for Tax Administration)

The Treasury Inspector General for Tax Administration, or TIGTA, examined compliance procedures at the Internal Revenue Service and said after sampling 124 taxpayers claiming biofuel credits, 42 had not submitted the proper documentation. The erroneous claims in the sample, which included credits for alternative fuels (like liquified petroleum gas) and biodiesel, amounted to more than $30 million out of the roughly $252 million in credits claimed in the sample.

Carbon Offsets

(Entrex Carbon Market)

Entrex Carbon Market, Inc announced the launch of the “Entrex Carbon Revenue Index” or ECRI which will provide the market with monthly index of institutionalized compliance-grade carbon offset revenue performance. The Entrex Carbon Revenue Index will become the index of carbon project ‘performance’ versus traditional indexes which measure stock prices and ‘investor sentiment’” said Tom Harblin Partner.

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