California to Boost Renewable Diesel Use

Later this year, California regulators will vote whether to extend the state’s Low Carbon Fuel Standard(LCFS) from its current expiration in 2020 to 2030. If it passes, renewable diesel would be the biggest winner among biofuels. A shortage of renewable diesel in California would create a strong incentive for producers to build new capacity in the next decade, particularly in feedstock-rich Asia.

Bullish 2019 Advanced Biofuel Target

Proposed RFS targets for 2019 are circulating, though they are not yet official. The use of a cellulosic waiver limits any reduction in the overall advanced biofuels volume requirement. The result is a more than 400 million gallon increase in the requirement for “other” advanced biofuels. This advanced deficit will provide additional support for D4 and D5 RIN prices in 2019 and will widen D5 – D6 price differentials during the second half of 2018 and into 2019.