Insight
Gold rush: renewable diesel is reshaping the California market
Report summary
In this insight we take a closer look at the California LCFS and analyse the economics driving a surge of recently announced renewable diesel investments in the US. We first review how the program has affected refiners in California and the state’s refined product markets, then highlight how significantly it will continue to shape those market through 2030. We conclude with a summary of the announced investments by US refiners and an assessment of how the EU’s Renewable Energy Directive (REDII) could affect profitability for renewable diesel producers looking to maximize LCFS credit generation.
Table of contents
- A closer look at California’s Low Carbon Fuel Standard (LCFS)
- Why are the economics of producing renewable diesel so attractive?
- What are the implications of renewable diesel production for the diesel market in California?
- What are the alternatives for California petroleum diesel?
- How are California refiners responding?
- Can we expect this trend to advance outside of California?
- What does the future hold?
Tables and charts
This report includes 9 images and tables including:
- Figure 1: Historical and proposed CI reduction under LCFS
- Figure 2: LCFS credit and gasoline / diesel LCFS deficit prices
- Figure 3: LCFS credit generation by source type
- Table 1: Average CI of certified renewable diesel pathways under LCFS
- Figure 5: Renewable diesel value into California market and historical soybean oil price (FOB, Decatur)
- Figure 5: California biomass-based diesel volumes
- Figure 6: PADD III diesel exports
- Figure 7: PADD V diesel exports
- Figure 8: CDU capacities of California refiners (MPC Marathon and P66 San Francisco removed)
What's included
This report contains:
