Banked LCFS Credits Grow at Fastest Pace Since Q4 2016

LCFS credit generation outpaced deficit generation in four of the past five quarters.  This is an unexpected development in the program.  Some view it as COVID related and feel that deficit production has suffered due to less gasoline demand.  This does not mesh with the data. 

The California Air Resources Board (CARB) has a forecasted outlook for 2021 and beyond in their Illustrative Compliance. There are numerous scenarios based on supply and demand.  Most show deficits easily outpacing credits in 2021, with deficit production pegged at roughly 19 million metric tons and credit production a few hundred thousand below. 

Credit and deficit data through the third quarter of 2021 shows 14.6 million credits vs 14.2 million deficits. Year-end 2021 data should show deficit production near expectations and credit production exceeding forecast. This is…