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California LCFS average credit transfer up on week: CARB

Houston (Platts)--13 Jun 2018 139 pm EDT/1739 GMT


California's Low Carbon Fuel Standard carbon credit transfer values rose in the week ended June 10, according to the most recent Air Resources Board data released.

The volume-weighted average price in the most recent week of data was $148.66/mt, up from $135.49/mt the previous week. The lowest transfer was at $105/mt while the highest was $169.50/mt.

There were 302,149 mt transferred with a total value of $44.917 million, the data released Tuesday showed.

These weekly transfers are not necessarily representative of the current market, but are the credits transferred in the last week. If two parties traded last week for credits in the fourth quarter of 2018, that transaction will appear when the credits transfer in the fourth quarter, not in last week's report.

The average transfer in May rose to $140/mt from $129/mt in April. May saw 122 transfers with a total volume of 847,000 mt. Values ranged $92-$161/mt.

S&P Global Platts assessed LCFS carbon credits at $178/mt Tuesday.

LCFS credits are generated as obligated parties produce fuels below the annual carbon intensity requirement. For example, in 2018 the gasoline standard is 93.55 CI. If a party produces gasoline that is 90 CI, it generates credits that can be sold in the market to parties who generated a deficit, or gasoline above 93.55 CI.

Each credit represents 1 mt of carbon emissions.

The LCFS aims to reduce the carbon intensity of transportation fuels by 10% of 2010 levels by 2020. The initial years of the program required a 1% reduction, while 2018 requires a 5% cut, and the targets will accelerate in coming years.

--Wes Swift, wesley.swift@spglobal.com

--Edited by Derek Sands, derek.sands@spglobal.com




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