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Oregon CFP Remains Balanced Amid Evolving Renewable Diesel Dynamics

Oregon CFP Remains Balanced Amid Evolving Renewable Diesel Dynamics

Overview

Oregon’s Clean Fuels Program recorded a narrow credit surplus in Q4 2025. According to DEQ’s quarterly data summary, regulated parties generated 782,559 metric tons (MT) of credits in Q4 2025 against 773,802 MT of deficits, leaving the quarter at a net surplus of 8,757 MT. Cumulatively through Q4 2025, the program has generated about 17.19 million metric tons (MMT) of credits and 16.58 MMT of deficits, leaving a modest bank of roughly 0.61 MMT.

Key takeaways from Q4 2025

Q4 2025 credits strengthened meaningfully, rising to 782,559 metric tons and outpacing deficits for the first time since Q4 2024. The credits rose by about 22% while the deficits fell by ~10% QoQ. (To note: Incremental residential EV credits for the year are yet to be published by DEQ).
Renewable diesel remained the largest credit source, generating about 369,346 MT and accounting for roughly 47% of total Q4 credits. Its share in the diesel pool rose to about 25% in Q4 from around 14% in Q3 2025, while volumes increased to 48.8 million gallons and average CI improved from 34.7 to 31.7 gCO2e/MJ. At the same time, reported biodiesel and diesel volumes, without adjusting for B5 and B20 blends, declined QoQ by about 13% and 22%, respectively.
AJF credit generation surged to 4,697 MT in Q4, up 408% from Q3 (had only 924 MT credits), supported by a 388% increase in volumes to 815,385 gallons. Average CI also improved from 45.10 to 43.28 gCO2e/MJ, showing stronger credit generation alongside better carbon performance.
Electricity continued to gain traction as a credit source, consistent with DEQ’s note that EV related credits are increasing steadily as the electric vehicle population grows in Oregon.
Bio-CNG volumes were broadly flat, declining just 0.16% YoY, from 995,563 gallons in Q4 2024 to 993,991 gallons in Q4 2025. Even so, credit generation jumped by about 327% YoY, from 9,553 MT to 40,855 MT, mainly because the average CI for Bio CNG and Bio LNG improved sharply from 10.42 to -225.64 gCO2e/MJ.

cCarbon’s forecasting accuracy & Outlook

Starting in 2026, gasoline’s baseline carbon intensity will decrease from 100.14 gCO2e/MJ in 2025 to 98.12 gCO2e/MJ, reflecting improved modeling of crude oils processed in Washington’s refineries. Diesel’s baseline CI will increase from 101.74 to 104.92 gCO2e/MJ due to updated research on nitrogen oxide emissions, and CNG’s baseline CI will rise from 79.98 to 81.89 gCO2e/MJ to account for higher methane leakage. Overall, the update has a mixed effect, increasing deficits for gasoline while easing compliance pressure for diesel and CNG.
Renewable diesel dynamics in Oregon are likely to remain supported by relatively stronger program economics. As noted in our recent article, Oregon continues to offer one of the highest domestic producer netbacks, maintaining a premium over both California and Washington, which could incentivize additional RD volumes into the state. The increase in diesel benchmark CI beginning in 2026 may further improve credit generation potential for RD pathways, strengthening blending economics and potentially supporting higher RD penetration within Oregon’s diesel pool.
Looking ahead, DEQ has formed a Rulemaking Advisory Committee to provide input on potential amendments to the program. The rulemaking will evaluate the status of the clean fuels market and consider updates to carbon intensity standards aimed at achieving at least a 50% reduction by 2040. It will also examine alignment with neighbouring low carbon fuel programs, opportunities to expand transportation electrification in a cost-effective manner while maintaining affordable and reliable energy for consumers, and potential updates to offsite renewable electricity provisions, electricity carbon accounting methodologies, and other regulatory clarifications.

Conclusion

Q4 2025 indicates that Oregon’s Clean Fuels Program remains relatively balanced, with credits narrowly exceeding deficits and the bank stabilizing. Looking ahead, stronger Oregon netbacks and higher diesel benchmark CI values could support renewable diesel growth, while electricity gradually grows to anchor long term credit generation.