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California LCFS |
Oregon LCFS |
Price April 14th, 2023 |
$ 80.00 |
$ 132.00 |
Average Weekly Price April 10th, 2023 - April 14th, 2023 |
$ 76.30 |
$ 129.60 |
Average Monthly Price April 2023 |
$ 74.56 |
$ 128.89 |
Prompt California LCFS prices rallied nearly $4.00/t, or 5.42%, on the week. LCFS markets have been supported by trader buying in recent weeks. Gains were more pronounced in the second half of the year.
Contango in the forward structure steepened across all quarters for the year.
LCFS Futures Contract |
Pricing |
Dec. '23 | $ 85.35 |
Dec. '24 | $ 92.50 |
Dec. '25 | $ 94.99 |
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D3 |
D4 |
D5 |
D6 |
Price April 14th, 2023 |
$ 1.95 |
$ 1.58 | $ 1.57 | $ 1.55 |
Average Weekly Price April 10th, 2023 - April 14th, 2023 |
$ 1.94 |
$ 1.58 | $ 1.57 | $ 1.55 |
Average Monthly Price April 2023 |
$ 1.94 |
$ 1.57 | $ 1.56 | $ 1.53 |
D4 RINs posted gains on bullish headlines last week, while traders continue to await the expected June 14 finalization of the ‘Set Rule.’ Gains were more pronouned for D6 credits, while D3 credits were marginally higher on a week-over-week basis.
News that United Refining was denied its SRE hardship waiver by the Third Circuit court proved bullish to the overall RIN complex as the move adds additional demand to the marketplace. Trade organization Growth Energy entered comments in support of enforcing SREs in its case against the EPA. A full denial of all SREs would represent more than 1.6 billion RINs
Prior to this month’s moves, the approval by a federal court of a SRE for Calumet Special Products 30,000 b/d refinery in Montana provided bearish undertones to RIN markets.
SREs were carved out in the Renewable Fuel Standard (RFS) for refiners producing 75,000 b/d or less which could prove compliance with the RFS—i.e., purchasing RINs—resulted “undue economic hardship.”
The chance of a pivot in the EPA's approach to SREs continued to provide underlying bearish sentiment. A reversal or dovish change in SRE policy would have an outsized impact on the D6 category.
Market activity is likely to remain curtailed ahead of guidance from the EPA expected in June.
Questions? Contact our team for more information: environmental@aegis-hedging.com