Washington RD deliveries up in 3Q 2023

  • Market: Biofuels, Emissions
  • 01/04/24

Renewable diesel (RD) deliveries into Washington nearly doubled in the third quarter of 2023 as the state's young low-carbon fuel standard (LCFS) built credits for future compliance.

The state Department of Ecology reported a 76pc increase in total renewable diesel volumes delivered into the state for the period in quarterly data posted late last week. Total new credits outpaced new deficits by almost 160,000 metric tonnes (t) in the quarter, according to the data.

Renewable diesel use in the state averaged about 5,170 b/d, up from 2,965 b/d in the second quarter. The volume was about 7.6pc of the implied liquid diesel pool for the period. Biodiesel use fell by about 18pc from the previous quarter, to about 485 b/d, while petroleum diesel rose by about 27pc to about 62,000 b/d.

Gasoline use generated about 70pc of new deficits in the third quarter, higher by more than 3pc from the previous quarter. In-state consumption rose by 3.2pc to about 166,000 b/d.

LCFS programs require yearly reductions in transportation fuel carbon intensity. Higher-carbon fuels that exceed the annual limits incur deficits that suppliers must offset with credit generation from the distribution to the market of approved, lower-carbon alternatives.

Washington began enforcement of its LCFS last year. Obligated parties will demonstrate compliance with the first two years of the program simultaneously, in April 2025. The program will switch to annual compliance, like other North American LCFS programs, after 2024.

Rising supplies of unused credits available for future compliance have dragged down prices in California's LCFS market. But credit builds are often intentional in new programs such as Washington's, to cushion the transition to tougher annual targets in the future.


Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News
24/04/24

Cepsa supplies HVO bunker fuel in Algeciras

Cepsa supplies HVO bunker fuel in Algeciras

London, 24 April (Argus) — Spanish refiner and bunker fuel supplier Cepsa has recently delivered 150t of 100pc hydrotreated vegetable oil (HVO) by truck to the Ramform Hyperion at the port of Algeciras. The supply follows market participants reporting firmer buying interest for HVO as a marine fuel from ferry lines in the Mediterranean in recent sessions. The supplied HVO is said to be of class II, with used cooking oil (UCO) as the feedstock. Cepsa added that the supply was completed in cooperation with Bunker Holding subsidiary Glander International Bunkering, and could bring about a greenhouse gas (GHG) emissions reduction of up to 90pc compared with conventional fuel oil. Cepsa will also look to obtain capability to supply marine biodiesel blends exceeding 25pc biodiesel content by the end of the year, delegates heard at the International Bunker Conference (IBC) 2024 in Norway. This also follows plans by Cepsa to build a 500,000 t/yr HVO plant in Huelva , set to start production in the first half of 2026. Argus assessed the price of class II HVO on a fob Amsterdam-Rotterdam-Antwerp (ARA) basis at an average of $1,765.54/t in April so far, a premium of $906.41/t to marine gasoil (MGO) dob Algeciras prices in the same month. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Read more
News

New ISO 8217 eyes wider scope for alternative fuels


24/04/24
News
24/04/24

New ISO 8217 eyes wider scope for alternative fuels

London, 24 April (Argus) — The 7th edition of ISO 8217, to be published in the second quarter of this year, will outline a broader integration of marine biodiesel blending, delegates heard at the International Bunker Conference (IBC) 2024 in Norway. Tim Wilson, principal specialist fuels of Lloyds Register's fuel oil bunkering analysis and advisory service (FOBAS), presented on the upcoming iteration of the ISO 8217 marine fuel specification standard, which will be released at IBC 2024. The new edition will incorporate specification standards for a wide range of fatty acid methyl ester (Fame)-based marine biodiesel blends up to B100, 100pc hydrotreated vegetable oil (HVO), as well as synthetic and renewable marine fuels. This will also include additional clauses to cover a wider scope, and briefly touch on biodiesel specifications that do not entirely align with road biodiesel EN-14214 specifications. This follows the emergence of widening price spreads for marine biodiesel blends because of specification differences and the lack of a marine-specific standard for the blends. The new edition of ISO 8217 is also expected to remove the limit of 7pc Fame when blended with distillate marine fuels such as marine gasoil (MGO) which was in place in the previous ISO 8217:2017. Other changes to distillate marine biodiesel blends include changes to the minimum Cetane Index, oxidation stability alignment to be connected to either ISO 15751 for blends comprising 2pc or more of Fame biodiesel and ISO 12205 for blends comprising a Fame component of under 2pc. Cold-filter plugging point (CFPP) properties will be determined by the vessel's fuel storage tanks' heating capabilities and requirements will be set in place to report the CFPP for distillate marine biodiesel grades, according to the new edition of the marine fuel specification standard. Wilson said that a minimum kinematic viscosity at 50°C will be in place for various forms of residual bunker fuel oil along with a viscosity control alerting suppliers to inform buyers of the exact viscosity in the supplied fuel. He said they have seen delivered fuel viscosity come in at much lower levels than ordered by the buyers, which was the reasoning behind the viscosity control monitoring requirement. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Peninsula eyes B100 marine fuel supply in Barcelona


24/04/24
News
24/04/24

Peninsula eyes B100 marine fuel supply in Barcelona

London, 24 April (Argus) — Marine fuel supplier and trader Peninsula has added a chemical tanker to its fleet in Barcelona, with a view to supply the port with B100 marine biodiesel. Aalborg meets chemical tanker regulations under the International Maritime Organisation (IMO)'s International Convention for the Prevention of Pollution from Ships (MARPOL) Annex II. This means the tanker can supply marine biodiesel blends containing up to 100pc fatty acid methyl ester (Fame), which conventional oil tankers are unable to do . Oil tankers and barges are limited to up to 25pc Fame. Peninsula added that the Aalborg is also used to supply conventional fossil bunker fuels such as very-low sulphur fuel oil (VLSFO) and marine gasoil (MGO). It is yet to complete a B100 delivery in Barcelona. Market participants pointed to limited demand for B100 in the Mediterranean, but regulatory changes such as the introduction of FuelEU maritime next year may help to support demand for marine biodiesel blends. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

US-led carbon initiative misses launch date


23/04/24
News
23/04/24

US-led carbon initiative misses launch date

Houston, 23 April (Argus) — The Energy Transition Accelerator (ETA), a global initiative to use voluntary carbon market revenue to speed the decarbonization of developing countries' power sectors, has missed its planned Earth Day launch but continues to prepare for doing business. At the Cop 28 climate conference in Dubai last year, the initiative's leaders said they hoped to formally launch the program on 22 April 2024 . That didn't happen, but the program's leaders last week announced that the US climate think tank Center for Climate and Energy Solutions will serve as the ETA's new secretariat and that former US special presidential envoy for climate John Kerry will serve as the honorary chair of an eight-member senior consultative group that will advise the ETA's design and operations. The ETA plans to spend 2024 "building" on a framework for crediting projects they released last year. ETA leaders said the initiative could ultimately generate tens of billions of dollars in finances through 2035. The ETA also said the Dominican Republic had formed a government working group to "guide its engagement" as a potential pilot country for investments and that the Philippines would formally participate as an "observer country" rather than as a direct participant immediately. The ETA is still engaging Chile and Nigeria as potential pilot countries too, the initiative told Argus . The ETA is being developed by the US State Department, the Rockefeller Foundation, and the Bezos Earth Fund and would be funded with money from the voluntary carbon market. The initiative's ultimate goal is to allow corporate and government offset buyers to help developing countries decarbonize their power sectors through large projects that accelerate the retirement of coal-fired power plants and build new renewable generation. As of now, the ETA's timeline for future changes and negotiations with countries and companies is unclear. The program's goals are ambitious, especially at a time when scrutiny of some voluntary carbon market projects from environmentalists has weighed on corporate offset demand. By Mia Westley Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Brazil 1Q tallow exports triple on long-term contracts


22/04/24
News
22/04/24

Brazil 1Q tallow exports triple on long-term contracts

Sao Paulo, 22 April (Argus) — Brazilian beef tallow exports totaled 73,930 metric tonnes (t) in the first quarter, a three-fold increase from the same three-month period in 2023 on rising demand. Almost 93pc of outflows between January and March were shipped to the US, according to data from Brazil's trade ministry. Long-term contracts explain the rising flow of exports, even though spot market arbitrage was closed throughout the first quarter (see chart) . The price of tallow in the Paranagua and Santos ports was $960/t fob on 19 April, keeping the arbitrage closed to US Gulf coast buyers, where the reference product was at $901/t on a delivered inland basis. Brazilian tallow is also negotiated at a premium against soybean oil, which closed at $882/t fob Paranagua on 19 April. This scenario has been observed since the 1 December 2023 start of Argus ' tallow export price assessment. Historically, vegetable oil in Brazil was traded at a discount to tallow, but strong demand has boosted the price of animal fat. Some biodiesel plants have been purchasing used cooking oil (UCO) or pork fat as an alternative. In 2023, there were doubts about whether the outflow of tallow from Brazil would be constant. Market participants now believe that the 2024 start of operations at new renewable diesel refineries in the US should sustain exports. Local suppliers that have already signed supply guarantee contracts — some up to three years — with American buyers are also considering export opportunities with Asia, including a new renewable diesel plant in Singapore that could receive Brazilian cargoes. Expansion projects are propelling US demand, including work that would bring capacity at Marathon Petroleum's Martinez Renewables plants in California to 2.35mn m³/y (40,750 b/d)and the Phillips 66 Rodeo unit in northern Californiato 3mn m³/y. These and other new projects will increase annual US demand for tallow by 5mn t. Maintenance on the horizon Maintenance at US refineries has Brazilian sellers bracing for a short-term drop in prices. Between May and June the Diamond Green Diesel (DGD) unit in Port Arthur, Texas, will shut down for maintenance, a stoppage that could impact demand for Brazilian inputs. Market participants have already observed a slight increase in domestic tallow supply, a change they attribute to maintenance at DGD. The advance of the soybean crop in Argentina is also expected to increase the supply of feedstocks to North American plants, as some refineries are returning to soybean oil after a hiatus of several years. The soybean oil quote on the Chicago Board of Trade (CBOT) is an important reference for the price of tallow. By Alexandre Melo Renewable feedstocks in Brazil on fob basis R/t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more