Oregon CFP credit bank continues to grow

The surplus of Oregon Clean Fuels Program (CFP) credits grew to a record volume in the first quarter of the year with renewable diesel continuing to increase its share of the state's diesel pool.

The pace of credit generation slowed in the quarter but still exceeded deficits by about 105,000 metric tonnes (t), bringing the total volume of credits available for future use to nearly 1.3mn t, according to state data published on Thursday.

The growth in the surplus came largely as the result of a continued surge in renewable diesel use in Oregon, with totaled more than 55.6mn USG in the quarter. The fuel accounted for more than 60pc of all new credits in the first quarter with more than 444,000, a more than 10pc increase from the previous quarter and a more than 210pc jump from 1Q 2023. It also represented more than 29pc of the liquid diesel pool.

Biodiesel generated about 13pc of new credits or about 92,400t during the quarter, as total use fell by more than 26pc from the previous quarter and about 14pc from a year prior.

Deficit generation increased by about 3.6pc from the previous quarter to about 611,000 t as the new year brought with it an increase in the overall carbon intensity target for the program. Gasoline deficits jumped by more than 10pc compared with the fourth quarter of 2023 and 18pc from the first quarter last year. Petroleum diesel deficits also increased by more than 9pc even as consumption declined by more than 7pc from the prior quarter and 17pc from a year ago.

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

Oregon requires a 20pc reduction by 2030 and 37pc by 2035. This year's target is 8pc, up from 6.5pc last year. An ongoing rulemaking process this year will consider changes to how the state calculates the carbon intensity of fuels and verifies the activity of participants, but it will not touch the annual targets.

Spot Oregon credits have fallen by nearly 60pc since the previous data release in May and about 88pc since late September, when state data offered the first indications that renewable diesel that was already inundating the California market had found its way to the smaller Oregon pool. Argus assessed Oregon credits at $20/t on Thursday.

By Michael Ball