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California LCFS credit transfers rise on week: CARB

Houston (Platts)--27 Dec 2017 103 pm EST/1803 GMT


California's Low Carbon Fuel Standard carbon credit transfer values rose in the week ended December 24, the most recent Air Resources Board data showed.

The volume-weighted average price in the most recent week was $100.15/mt, up from $95.78/mt the previous week. The lowest transfer was at $76/mt, while the highest was $112/mt.

There were 476,480 mt transferred with a total value of $47,720,612.

Both volumes and total value spiked as the end of the quarter and year drew near.

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 first quarter of 2018, that transaction will appear when the credits transfer in the first quarter, not in last week's report.

S&P Global Platts assessed LCFS carbon credits at $111/mt Tuesday.

LCFS credits are generated as obligated parties produce fuels below the annual carbon intensity requirement. For example, in 2017 the gasoline standard is 95.02 CI.

If a party produces gasoline that is 90 CI, it generates credits that can be sold in the market to parties that generated a deficit, or gasoline above 95.02 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 2017 requires a 3.5% cut and the targets will accelerate in coming years.

--Josh Pedrick, joshua.pedrick@spglobal.com
--Edited by Annie Siebert, ann.siebert@spglobal.com

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