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WA CFS Q1 2026: Biofuel Volumes Rebound; Deficits Nearly Double YoY as Tighter CI Standards Take Effect

WA CFS Q1 2026: Biofuel Volumes Rebound; Deficits Nearly Double YoY as Tighter CI Standards Take Effect

Overview

Washington Clean Fuel Standard reported a sharp increase in deficits in Q1 2026 as the statutory 2026 carbon-intensity standards took effect. The quarterly data summary shows 332,593 MT biofuel credits and 84,078 MT electricity credits, with total reported credits of 416,671 MT , against 631,865 MT of deficits, leaving a reported net deficit position of 215,194 MT for the quarter. However, electricity data remains incomplete because all Q1 2026 Non-metered Residential EV Charging credits will be included in a future quarterly data summary.

Key takeaways from Q1 2026

In Q1 2026, Renewable Diesel volumes reached 21.32M gallons, rising 14.46% QoQ but falling 26.07% YoY. Biodiesel rebounded more sharply to 5.79M gallons, up 204.53% QoQ and 229.89% YoY.
Canola oil and soybean oil accounted for around 78% of reported RD volume in Q1 2026, at 8.19M and 8.43M gallons, respectively. Distillers’ corn oil and tallow contributed another ~22%, leaving the RD feedstock mix heavily concentrated in these four categories.
RD’s share in the diesel pool increased to 12.9% in Q1 2026 from 11.0% in Q4 2025, but remained below 16.0% in Q1 2025.
Ethanol volumes increased 29.14% QoQ to 65.16M gallons and were broadly flat YoY (-1.03%). The ethanol blending rate rose to 12.84%, from 8.89% in Q4 2025 and 11.43% in Q1 2025.
Average CI improved QoQ across RD, BD, and ethanol, falling to 52.8 gCO₂e/MJ, 54.3 gCO₂e/MJ, and 66.89 gCO₂e/MJ from 57.72 gCO₂e/MJ, 60.94 gCO₂e/MJ, and 68.22 gCO₂e/MJ in Q4 2025, respectively.
Total biofuel credits increased 10.67% QoQ to 332.6K but remained 13.04% below Q1 2025. RD credits rose 14.29% QoQ to 111.5K, while BD credits increased 63.41% to 31.0K; ethanol credits were broadly unchanged QoQ at 154.1K.
Despite gasoline volumes falling 14.49% QoQ and diesel volumes declining 7.50%, gasoline and diesel deficits increased 105.87% and 140.11%, respectively, to 458.6K and 149.7K. The increase was primarily driven by tighter statutory 2026 benchmark CI levels.
Overall deficits reached 631,865 MT in Q1 2026, up 90.66% QoQ and 99.70% YoY. Gasoline alone accounted for 72.6% of total deficits, making the 2026 benchmark tightening the dominant driver of the reported quarterly balance.

cCarbon’s forecasting accuracy & Outlook

cCarbon’s Q1 2026 nowcasting projected biofuel credit generation at 256.3K credits, compared with the reported 332.6K. This corresponds to about 77% accuracy, mainly driven by sharp increase in biodiesel and RD share. Total reported credits stand at 416.7K after adding 84.1K electricity credits, but total-credit accuracy cannot yet be assessed on a like-for-like basis because Q1 Non-metered Residential EV Charging credits are not included.
Due to the unavailability of complete residential EV credit data when the Q4 2025 results were published, cCarbon projected the credit bank at 4,212.2K credits, compared with the subsequently reported 4,215.8K credits, reflecting 99.9% accuracy.
For deficits, cCarbon nowcasted 676.3K MT against 631.9K reported, corresponding to about 93% accuracy. Ethanol credit generation was particularly close at 150.8K versus 154.1K reported, reflecting about 98% accuracy, while RD credits were under-forecast at 74.1K versus 111.5K, or about 66% accuracy.
The Q1 results show the impact of the benchmark CI step. Washington’s total carbon-intensity reduction increased from 2% in 2025 to 7% in 2026, with gasoline and diesel standards tightening to 92.00 and 93.10 gCO₂e/MJ. This increases credit demand even when fossil-fuel volumes decline. cCarbon’s nowcasting continues to indicate lower RD incentive support in Washington than in Oregon and California, while Ecology is separately developing the 2028-2038 reduction trajectory.

Conclusion

Overall, Q1 2026 marks a shift in WA CFS’s reported quarterly balance: 416.7K credits were reported against 631.9K deficits, resulting in a 215.2K reported deficit. This should be treated as provisional because all Q1 Non-metered Residential EV Charging credits are still pending; the final quarterly balance will improve when those credits are added.

The underlying signal is nevertheless clear: tighter 2026 CI standards materially increased gasoline and diesel deficits even as fossil-fuel volumes declined. Biofuel volumes and credits recovered QoQ, led by RD and BD, but Washington’s lower relative incentive remains a constraint on incremental supply. The existing credit bank continues to provide a near-term buffer while Ecology develops the 2028-2038 trajectory.

Stay tuned for the next version of nowcast trendsheet for CFS markets, (available for paid customers).