California LCFS Weekly Transaction Report

California LCFS Weekly Transaction Report

Weekly credit volume hit the brakes during the first full week of May, reaching its lowest weekly total since June 4, 2017. Credit volume of 15,493 was 98 percent below last week’s total and 71 percent below the same period in Q2 2019.  The average price paid per credit was $193.2, down $3.99 from last week. There were 8 transactions, six were type 1 transfers of 10,993 credits and two were type 2 transfers of 4,500 credits. Type 1 transactions are trades executed within 10 days of a transfer agreement. Type 2 transactions are executed beyond 10 days of a transfer agreement. Type 1 transactions give a clearer picture of where the market is currently trading since Type 2 transactions do not give a date the agreement was entered into. The weighted average price for type 1 trades was $193.90 and the weighted average for all trades was $193.20. Average 2020 weekly credit volume declined to 414,481 contracts per week. Second quarter volume is 105 percent over first quarter volume and 261 percent over Q2 of 2019.

Trading was heaviest on Thursday with 68 percent of the volume transacted. The highest average daily price was $194, which occurred on Thursday. The price range credits traded in narrowed from $170 – $218 last week, to $189 – $196 this week. The value of credits transacted totaled $3.0 million, down from $179 million last week. At the top of the range, 3,000 credits traded for $196 and 2,000 traded for $189 at the bottom of the range. Eighty-seven percent of the transactions occurred at a price between $190 and $209.99, and 13 percent fell below $190. The value of this year’s credit transactions is 1.6 billion dollars, which is 119 percent over last year’s total of 717 million through the same weekly period. CARB has proposed to place a hard cap of $200 based on a 2016 base-year adjusted for inflation for the LCFS credit. This pending amendment is currently on schedule to become effective July 1, 2020.

CARB only includes transfers that are completed in the given week. Transfers for future dates, proposed and still pending confirmation, are excluded. CARB’s weekly report excluded nine transfers this week for a total of 4,053 credits. CARB will exclude transfers that trade at, or near, zero in price.

 

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