LCFS Transaction Volume & Avg Price Trend Higher

Weekly credit volume continued to move higher over the past week rising to 197,476 credits transacted, which was 17 percent over volume posted the week prior and 176 percent over the volume at this time last year. Despite the increase, this week’s volume remains below the 2020 weekly average of 392,459. The average price paid per credit was $197.48.14, up $3.34 from last week. There were 22 transactions, 10 were type 1 transfers of 169,956 credits and 12 were type 2 transfers of 27,500 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 $198.29, which was more than $4.00 over the average price of all trades. Second quarter volume is 99 percent over first quarter volume and 249 percent over Q2 of 2019.

Trading was heaviest on Wednesday with 36.5 percent of the volume transacted. The highest average daily price was $210, which occurred on Thursday. The price range credits traded in narrowed from $184 – $210 last week, to $184.50 – $210   this week. The value of credits transacted totaled $39 million, up from $32.8 million last week. At the top of the range, 10,000 credits traded for $210 and 10,000 traded for $184.50 at the bottom of the range. Five percent of the transactions occurred at a price of $210, 72 percent at a price between $190 and $209.99, and 23 percent fell below $190. The value of this year’s credit transactions is 1.64 billion dollars, which is 118 percent over last year’s total of 752 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 two transfers this week for a total of 299 credits. CARB will exclude transfers that trade at, or near, zero in price.