Washington RD deliveries up in 3Q 2023

Renewable diesel (RD) deliveries into Washington nearly doubled in the third quarter of 2023 as the state's young low-carbon fuel standard (LCFS) built credits for future compliance.

The state Department of Ecology reported a 76pc increase in total renewable diesel volumes delivered into the state for the period in quarterly data posted late last week. Total new credits outpaced new deficits by almost 160,000 metric tonnes (t) in the quarter, according to the data.

Renewable diesel use in the state averaged about 5,170 b/d, up from 2,965 b/d in the second quarter. The volume was about 7.6pc of the implied liquid diesel pool for the period. Biodiesel use fell by about 18pc from the previous quarter, to about 485 b/d, while petroleum diesel rose by about 27pc to about 62,000 b/d.

Gasoline use generated about 70pc of new deficits in the third quarter, higher by more than 3pc from the previous quarter. In-state consumption rose by 3.2pc to about 166,000 b/d.

LCFS programs require yearly reductions in transportation fuel carbon intensity. Higher-carbon fuels that exceed the annual limits incur deficits that suppliers must offset with credit generation from the distribution to the market of approved, lower-carbon alternatives.

Washington began enforcement of its LCFS last year. Obligated parties will demonstrate compliance with the first two years of the program simultaneously, in April 2025. The program will switch to annual compliance, like other North American LCFS programs, after 2024.

Rising supplies of unused credits available for future compliance have dragged down prices in California's LCFS market. But credit builds are often intentional in new programs such as Washington's, to cushion the transition to tougher annual targets in the future.

By Elliott Blackburn