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  • Interactions among LCFS markets and the case for Renewable Diesel | Analyst Note | October 2023
Clean Fuel Standards
RFS
OR CFP
BC LCFS
CA LCFS
Interactions among LCFS markets and the case for Renewable Diesel | Analyst Note | October 2023
Tuesday, 24th October 2023

This analyst note presents a comprehensive analysis of several clean fuel standards, with an emphasis on a comparison of programme scope, credit prices, and credit volumes. Aside from the fact that it is informational, it is also provides the fuel producers or suppliers with actionable insights. It enables fuel producers or suppliers to analyse the different benefits of participating in a given CFS market by supplying renewable diesel. 

The key takeaways are: 

  • There is a mosaic of clean fuels markets, and the interactions are not always straight-forward 
  • Detailed examination of renewable diesel shows that there will be a drop in margin generation across all the markets and suppliers will use relative incentives generation to decide where to ship 
  • Bank indices suggests that suppliers will sell their fuel in Oregon CFP, reducing the delta with California LCFS over time 
Table of Contents

Section 1: There is a mosaic of clean fuels markets, and the interactions are not always straight-forward 

  • Overview of clean fuel standard markets  
  • Cross market credit price and volume comparison 

Section 2: Detailed examination of Renewable Diesel 

  • CFS.CarbonOutlookTM Renewable Diesel Model 
  • Total incentive generation in different CFS markets in North America 
  • Value Give Back Index 
  • Tax incentives: IRA and CFPT 
  • Consumption, Revenue and margin generation in the RD market 
  • Sensitivity of CI changes to CFS incentive generation, total revenue generation and margin generation 

Section 3: Bank indices for CA LCFS and OR CFP 

  • Credit/Deficit Ratio 
  • Running Credits/Running Deficits Ratio 
  • Bank/Trailing Deficits Ratio 

 

 

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cCarbon has mapped both the demand as well as supply of SAF to size the market. The research indicates that global SAF consumption in 2022 (as per offtake agreements) stood at 494 million litres.
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