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WA CFS Q4 2025 Data Shows Another Credit Surplus Quarter Despite Declining Overall Biofuel Volumes

WA CFS Q4 2025 Data Shows Another Credit Surplus Quarter Despite Declining Overall Biofuel Volumes

Overview

Washington Clean Fuel Standard recorded a decline in biofuel credit generation in Q4 2025. As per the quarterly data summary, regulated parties generated 301,046 biofuel credits and 219,396 electricity credits against 331,178 MT of deficits, leaving the quarter in a net surplus position. As per WA CFS, electricity credit data remains partial due to incomplete Non-metered Residential EV Charging credits and will be updated in a future quarterly data summary.

Key takeaways from Q4 2025

In Q4 2025, Renewable Diesel volumes reached 18.63M gallons, rising 9.48% QoQ but falling 38.23% YoY. Biodiesel volumes saw the sharpest decline, falling 78.39% YoY to 1.90M gallons, likely reflecting lower returns compared with other CFS markets.
In Q4 2025, 88% of reported RD volume came from any plant oil, soybean oil, and tallow feedstocks.
RD’s share in the diesel pool declined from 16% in Q1 2025 to 11% in Q4 2025, though it increased from 7.5% in Q3 2025.
Ethanol volumes declined 4.70% YoY, falling to 50.45M gallons in Q4 2025 from 52.94M gallons in Q4 2024. The ethanol blending rate remained broadly stable, rising slightly to 8.89% from 8.80% over the same period, but Q4 marked the lowest blending rate during 2025.
In Q4 2025, the reported average CI for RD, BD, and ethanol stood at 58 gCO₂e/MJ, 61 gCO₂e/MJ, and 68 gCO₂e/MJ, respectively, the highest among the three West Coast clean fuel markets: CA LCFS, OR CFP, and WA CFS.
Total biofuel credits declined 31.62% YoY in Q4 2025, mainly due to lower volumes and higher average CI. RD credit generation declined 39.63% YoY, primarily due to lower RD volumes. RD credits also fell 3.09% QoQ despite volumes increasing from 17.08M gallons in Q3 2025 to 18.63M gallons in Q4 2025, largely because average CI rose from 53 gCO₂e/MJ to 58 gCO₂e/MJ.
Despite gasoline volumes falling from 549M gallons in Q4 2024 to 517.2M gallons in Q4 2025, and diesel volumes declining from 169.4M gallons to 147.9M gallons, gasoline and diesel deficits increased by 33.11% YoY and 32.14% YoY, respectively. This was mainly driven by tighter benchmark CI levels.
Overall deficits, including those generated from biofuels, stood at 331,178 MT in Q4 2025, rising 13.38% YoY from 292,100 MT in Q4 2024.

cCarbon’s forecasting accuracy & Outlook

cCarbon’s Trendsheet released on 24th Feb,2025 nowcasted biofuel credit generation at 298.5K credits, compared with the reported value of 301K credits in Q4 2025. This reflects nearly 96% forecast accuracy for biofuel credits.
For deficits, cCarbon forecasted 293.2K deficits, while the reported value stood at 331.2K, reflecting 88% accuracy. The gasoline deficit forecast remained highly accurate, with cCarbon forecasting 217.6K deficits against the reported value of 222.7K, reflecting around 98% accuracy. The lower accuracy was mainly driven by higher-than-expected deficits from ethanol and biodiesel.
The decline in biofuel volumes was expected, given Washington’s lower incentive levels compared with other CFS markets, as highlighted in our recent article. However, ongoing rulemaking under HB 1409 and the adoption of new benchmark CI trajectories are expected to tighten benchmark CIs by 5% in 2026 and 4% in 2027, with further annual reductions of 3% or 4% from 2028, subject to finalization by the Department of Ecology. This will increase deficits and could support higher flows of RD, BD, and ethanol into the market. Even so, Washington is expected to remain less attractive than Oregon and California, where incentive support is stronger.

Conclusion

Overall, Q4 2025 indicates that WA CFS remained in a credit surplus position, with the surplus expected to increase further once complete EV charging credits are reported. Electricity continues to be the largest credit-generating pathway, while biofuel credit generation weakened due to lower RD and BD volumes and higher average CI.
With new rulemaking and tighter benchmark CI trajectories taking effect from 2026 onward, deficits are expected to rise, but the existing credit bank provides a strong near-term buffer. Based on current trends, the WA CFS credit bank is expected to surpass 4 million credits by the end of 2025.

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