LCFS

Goals

To determine the projected value of the LCFS credit in the next 5-10 years and find companies that help navigate the CARB application process.

Early Findings

Throughout our research, we noticed that there was not a lot of coverage on the predicted price for the LCFS credit. We tried to go through government and industry reports but information on the subject was somewhat limited. Unfortunately, we were also not able to find any companies that help navigate the CARB application process.
  • According to OPIS, the value for the LCFS credit has increased from $89/MT of CO2 to $194.15/MT of CO2, which represents an increase of over 117% in just two years.
  • The LCFS credit market was estimated to generate a revenue of $5.9 billion in 2019.
  • However, the CARD's new amendments, especially the price cap for LCFS credits, that were passed into action in January 2020, will most likely translate into a $2.9 billion in lost revenue for the segment.
  • The most common risk factors that was cited included the increase in deficit and the adoption of the price cap.
  • The price cap is currently sitting at $213.07/MT of CO2.
  • While Still Water Associates published a report in which they predict that prices for the LCFS credit will go down in the near future, there has been no sign of a decrease as the 2020 price for the LCFS credit has recently reached the market cap.
  • However, both the Stille Water Associates report and Breakthrough predict that there will be a rise in the number of credits given to biofuels such as renewable diesel, ethanol, biodiesel, and electricity.
  • While we were not able to identify companies that help navigate the CARB application process, we found that the EPA and CARB have an exhaustive list of certified third-party providers that are authorized to give CARB certifications to other companies.
  • Some examples of companies that provide CARB certifications include Intertek, ICTT Corp, Hardwood Plywood and Veneer Association (HPVA) , Composite Panel Association (CPA), and Benchmark Holdings.

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