Argus Media is the only price reporting agency to assess forward pricing for California’s Low Carbon Fuel Standard (LCFS) consistent with renewable fuel sales in the state.

LCFS programs are designed to reduce the carbon intensity of on-road transportation fuels with an increasing range of renewable fuel alternatives. State fuel suppliers must blend fuels or buy credits to comply with the annual targets. These credits can be banked, which helps with ensuring compliance in future years when targets become more stringent.

Fuels are issued carbon intensity scores based on lifecycle greenhouse gas (GHG) emissions:

Fuels above targets — gasoline, diesel — generate deficits
Low-carbon alternatives — including renewable diesel, renewable natural gas biodiesel and ethanol — generate credits
LCFS credits and deficits remain within the state where the fuels are used:

California LCFS requires a 20pc cut in GHG emissions from a 2010 baseline by 2030
Oregon’s Clean Fuels Program requires a 20pc cut by 2030 and 37pc by 2035