Latest market news

California considers tougher LCFS ‘step down’

  • : Biofuels, Emissions, Natural gas, Oil products
  • 24/04/09

California regulators may set more aggressive near-term targets for the state's Low Carbon Fuel Standard (LCFS) to help reduce the large volume of excess credits available in the market as they continue to explore guardrails for crop-based biofuels.

Those are among the changes the California Air Resources Board (CARB) floated in a staff presentation published on Tuesday ahead of a rulemaking workshop taking place tomorrow.

CARB's initial proposal, published in December, included a more stringent target of a 30pc reduction in transportation fuel carbon intensity by 2030, mechanisms to automatically make the program tougher when new credits outstrip new deficits by certain levels, and other modifications to the eligibility of certain fuels to create credits and deficits.

But following significant public feedback, the agency delayed a potential vote on the amendments and scheduled the new workshop.

CARB staff plan to maintain the 30pc by 2030 and 90pc by 2045 targets from the December proposal but are exploring using a steeper "step-down" in 2025 than previously proposed. It could be set at 7pc or 9pc, instead of 5pc. These steeper targets could help draw down the oversupply by 17mn-27mn credits cumulatively from 2024-2046, according to the staff presentation. The program had a record surplus of about 20.6mn credits at the end of the third quarter of 2023, according to the latest program data.

The cumulative drawdown could be even greater, around 170mn credits, if the proposed auto-adjustment mechanism is triggered twice over the next few years, according to the presentation.

Stakeholders have raised concerns on future impacts of crop-based biofuels during past workshops. CARB continues to explore guardrails to encourage the use of waste-based feedstocks and ensure that biofuel production does not come at the expense of deforestation or food production, it said in the workshop materials.

The agency has proposed requiring an independent feedstock certification process, implementing a built-in timeline to develop these standards and approval processes by third-party certifiers, and removing palm-derived fuels from being eligible for credit generation. CARB would leverage existing certification programs, including the International Sustainability and Carbon Certification (ISCC). The agency has proposed that all crop and forest-based feedstocks require certification by 1 January 2028.

For non-waste feedstocks, the carbon intensity score includes land-use change (LUC) value. The agency is evaluating whether to increase LUC for certain fuel/feedstock combinations, in an effort to minimize deforestation risks.

LCFS programs require yearly reductions in the carbon intensity of transportation fuels. Higher-carbon fuels that exceed the annual limit incur deficits that suppliers must offset with credits generated from the distribution of approved, lower-carbon alternatives. The program currently requires a 20pc carbon intensity reduction by 2030.


Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

24/09/26

Eastern US ports, railroads prepare for possible strike

Eastern US ports, railroads prepare for possible strike

Cheyenne, 26 September (Argus) — Ports in the eastern half of the US and railroads CSX and Norfolk Southern are starting to act on contingency plans as the deadline for a potential port worker labor strike nears. Port authorities in New York, New Jersey, Virginia, New Orleans, Louisiana, and Houston, Texas, have told customers at least some operations will stop effective 30 September if the International Longshoremen's Association (ILA) and US Maritime Alliance (USMX) cannot come to a new collective bargaining agreement. Union members have threatened to walk off the job as soon as 1 October, potentially bringing container cargo traffic to a halt in many regions. Other port authorities have been more circumspect on plans. The Maryland Port Authority, which oversees the Port of Baltimore, has said so far that it is "closely monitoring" the situation and that a strike "could impact" some operations. At the moment, ILA and USMX do not appear to be close to an agreement on a master labor contract. USMX today filed an unfair labor practice charge against ILA with the National Labor Relations Board, accusing the union of "repeated refusal" to negotiate. The union earlier this week said the two sides have talked "multiple times" and blamed the impasse on USMX continually offering "an unacceptable wage increase package." Container cargoes at greatest risk The potential port strike is expected to have the greatest impact on products carried on container ships. Movements of dry bulk cargo, such as coal and grains, are expected to be less affected by a potential work stoppage, though there could be side effects from the congestion of other products being rerouted to ports not affected by the strike. Some ports that have announced contingency plans expect to stop work on 30 September in stages. The Port of Virginia — including Norfolk International Terminals, Virginia International Gateway and Newport News Marine Terminal — would stop train deliveries at 8am ET on 30 September and require all vessels at the port to leave by 1pm. Container operations at Norfolk International Terminals and Virginia International Gateway would stop by 6pm ET that day, the port said. The New Orleans Terminal at the Port of New Orleans would stop receiving refrigerated exports at 5pm ET on 27 September and halt container vessel operations at 1pm ET on 30 September. It would also halt rail operations at 5pm ET on 30 September. Eastern railroads CSX and Norfolk Southern (NS) already have started curtailing some operations. CSX required temperature-controlled refrigerated equipment headed to East coast ports to be at CSX loadouts by 25 September and set deadlines for other export intermodal shipments to be at CSX loadouts by 25 September-5 October. NS required some eastern export shipments be at the railroad's loadout locations between 23-25 September and wants most of the rest of the container exports to be at its facilities by 5pm on 29 September. "We are proactively implementing measures to minimize potential operational impacts across our network, including at our Intermodal facilities," NS said on 23 September. The railroad also "strongly" recommended that customers not ship hazardous, high-value and refrigerated products by rail to export terminals "to avoid unexpected delays upon reaching the port destinations." By Courtney Schlisserman Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Low Argentina rivers lift Brazil biodiesel


24/09/26
24/09/26

Low Argentina rivers lift Brazil biodiesel

Sao Paulo, 26 September (Argus) — A drop in river levels in Argentina's Parana upriver region amid a historical drought has snarled transport and inflated soybean oil and biodiesel prices in Brazil. The depth of the Parana River in Argentina's San Lorenzo city, a major hub for soybean oil shipments, dropped to 9.44m (30ft) on 20 September, the lowest level since January 2023, according to information provided by maritime agencies T&T and Antares. The lower river flow is forcing soybean oil traders to reduce how much product they load onto tankers that stop at Argentinian ports by between 5-12.5pc, according to Argentina market sources. A 12.5pc capacity reduction on a standard tanker would mean a loading 28,000 metric tonnes (t) instead of 32,000t. These restrictions have affected the Brazilian soybean oil and biodiesel market, as trading companies seek additional volumes in Brazilian seaports to complete shipments for export. A change in Chicago Board of Trade (CBOT) differentials at the port of Paranagua was first observed on 27 September, when the premium for selling soybean oil for shipment in October rose to 8¢/lb in relation to the future contract traded on the CBOT. Earlier in the week, offers were close to 1.8¢/lb. On 25 September, negotiations ranged between premiums of 2.5-5.5¢/lb in relation to the soybean oil future contract due in October, corresponding to prices between $1,034-1,100/t fob Paranagua. Last week, the Argus fob Paranagua indicator closed between $934-1,009/t. Soybean availability in the Brazilian market is reduced amid strong demand in the domestic market, driven by an increase in the biodiesel blending mandate to 14pc from 12pc in March. The rise in domestic demand has also reduced the competitiveness of Brazilian exports, contributing to a drop in soybean oil shipments to ports. Brazil's association of vegetable oil industries Abiove predicts that 2024 exports will total 1.15mn t, nearly half of the volumes dispatched in 2023. Lever effect The low availability of soybean oil in the Brazilian market was concerning market participants even before the deterioration of the situation in Argentina. The price of soybean oil for export is the main factor in the price equation for most supply contracts between biodiesel producers and distributors. Logistics problems associated with a lower Parana River contribute to the imbalance between increased demand for soybean oil in the biodiesel sector and a shortage of product in the market. Soybean oil is the main input for biodiesel production in Brazil, accounting for 72.5pc of all feedstocks used in national production in the first eight months of 2024, according to data from hydrocarbons regulator ANP. And rising soybean oil prices tend to boost prices of other raw materials, such as beef tallow, which represented 6.5pc of biodiesel inputs in the same period. Faced with the rising cost of inputs, Brazilian biodiesel plants have been prioritizing the delivery of volumes contracted for the September-October supply period and the delivery of overdue volumes for the previous bi-monthly period. That has limited the availability of spot market volumes. This sudden rise in the price of soybean oil in Paranagua has also reduced the domestic market premium in relation to the export market. This makes it more attractive for regional producers to sell product abroad. By Amance Boutin and Joao Marinho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Aug wildfires in Brazilian state surge eightfold


24/09/26
24/09/26

Aug wildfires in Brazilian state surge eightfold

Sao Paulo, 26 September (Argus) — Fires in Sao Paulo, Brazil's most populous state, increased eightfold in August from the same month last year, an "alarming rate" amid extreme climate conditions that harm the sugarcane industry, sector associations said. The state had 11,628 fire outbreaks last month, more than triple the historic average of 3,550. Nearly half of the fires took place on 23 August alone, according to data from industry association Canaoeste and fire monitoring network GMG Ambiental. Fires hit 658,600 hectares. The town of Pitangueira had the most blazes, at 354. Altinopolis and Sertaozinho came in second and third, with 252 and 296, respectively. Nearly all of the most affected towns have high production of sugarcane. The groups highlighted that 20-24 August fires happened as low humidity, high temperatures and strong winds put Sao Paulo in "extreme risk" for wildfires. The data was shown in a meeting with several industry representatives, such as Canoeste, Unica and Orplana. The groups added that sugarcane producers were not responsible for the fires nor were benefiting from them, defending themselves from accusations that they could be lighting fires to accelerate harvesting — an old common practice supposedly abolished. By Maria Ligia Barros Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US Gulf oil shut-ins drop as Helene nears landfall


24/09/26
24/09/26

US Gulf oil shut-ins drop as Helene nears landfall

New York, 26 September (Argus) — US Gulf of Mexico oil production shut-in levels fell today as Hurricane Helene bore down on Florida's west coast as a category 3 storm, bringing the threat of dangerous storm surge and winds. Around 441,923 b/d of US offshore oil output, or 25pc, was off line as of 12:30pm ET, according to the Bureau of Safety and Environmental Enforcement (BSEE). That is down from 29pc on Wednesday as the eastern Gulf path of the storm took it farther away from most offshore production facilities. About 363.39mn cf/d of natural gas production, or 20pc of the region's output, was also off line today, up from 17pc on Wednesday. Operators have evacuated workers from 27 offshore platforms. Helene was last about 145 miles west-southwest of Tampa, Florida, packing maximum winds of 120mph, according to a 4pm ET advisory from the US National Hurricane Center. Further intensification is likely and Helene could approach the coast at category 4 strength, with winds of at least 130mph. Landfall is expected near Port Leon on Apalachee Bay Thursday evening before Helene is forecast to turn northwestward and slow down over the Tennessee Valley on Friday and into the weekend. Earlier this week, offshore operators including BP, Equinor and Chevron took the precaution of suspending some operations and evacuating workers from offshore facilities in advance of the hurricane. Some facilities have since started back up as the hurricane's track shifted away from the main oil and gas hub in the region. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

New York picks WCI for carbon market platform


24/09/26
24/09/26

New York picks WCI for carbon market platform

New York, 26 September (Argus) — New York state will use the Western Climate Initiative (WCI) platform when administering its economy-wide carbon market, the latest sign that regulators in the state are looking to align program elements with systems in other North American carbon markets. Regulators from Quebec and New York announced the agreement on Wednesday at the International Emissions Trading Association's North American Climate Summit, an event on the sidelines of the UN General Assembly and Climate Week NYC. After a competitive process to select a platform for its market, New York state reached a deal this week to lean on the WCI for its "market registry platform, the auction platform, and financial services", New York State Department of Environmental Conservation deputy commissioner Jon Binder said. The WCI nonprofit provides the market infrastructure for California and Quebec's linked carbon market, as well as for a similar program in Washington state where regulators are weighing a potential linkage with the other two. Any eventual linkage with New York's program, which could see compliance obligations start in 2026, would be made easier by all the jurisdictions utilizing the same system for administering their respective programs. The decision does not "necessarily mean these programs are linking," but New York is "happy to keep those conversations going in that regard," Binder said. Nova Scotia, which wound down its cap-and-trade program last year, used the WCI platform for auctions without linking its programs with any other jurisdictions. "It doesn't mean that New York will link with us," said Jean-Yves Benoit, chair of the WCI board and the director general of carbon regulation and emissions data at Quebec's environment ministry. "Although I would be very happy if we issue a joint press release next year saying that." By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more