Advanced BioFuels USA – Higher Gas Prices or a Path toward a Better Future? Here’s What You Need to Know about 2 Inslee-Backed Climate Laws Effective Jan. 1

by Laurel Demkovich (The Spokesman-Review/The Columbian) ... The reality: don’t expect the average price of gas to go up on Jan. 2 simply because of these policies. Some price increase could happen further down the line, but experts still aren’t sure what that number might be.

Washington’s clean fuel standard follows similar programs in California, Oregon and British Columbia. The program requires fuel suppliers to gradually reduce the amount of carbon emissions in their transportation fuels to 20% below 2017 levels over the next 15 years.

The idea is that fuels used in cars, trucks, boats, trains and aircraft would get progressively cleaner overtime.

To achieve that, the plan incentivizes the creation of alternative fuels in the state and penalizes producers of fuels that don’t meet the standard. Alternative fuels include ethanol; biofuels made from things like agricultural residue or waste; renewable diesel made from things like vegetable oil or food processing waste; electricity or hydrogen, among others.

The clean fuels standard will work with the cap-and-trade program to reduce the state’s overall emissions to only 5 million metric tons by 2050, according to state estimates.

Beginning Jan. 1, companies participating in the program can begin registering with the Department of Ecology. A cost-benefit analysis of the program done by the Berkeley Research Group estimated there would be 242 companies required to participate in the program. Required participants are companies that produce and import conventional gasoline and diesel products, such as Marathon or Valero.

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There is also an option for companies to voluntarily participate in the program. Companies like electric utilities, lower-carbon aviation fuel suppliers and clean fuel suppliers likely will voluntarily participate.

Each year, the Department of Ecology will set a carbon intensity standard that fuel producers must meet.

Any fuel that is used for transportation purposes gets reported to the department, which will then issue credits or deficits. If a company’s fuel is above the carbon emissions standard set by the department that year, they will get a deficit. If it’s below the standard, they will get a credit.

Companies are required to begin reporting their fuel by the end of the first quarter of the year, and deficits and credits likely will be awarded shortly after, said Joel Creswell, who oversees the clean fuels standard at Ecology.

Companies must end up with at least enough credits to offset the deficits to comply. If companies have any extra credits, they can sell them to companies that are short of credits. READ MORE

OPIS Washington Carbon Allowances Assessments Debut at $43/mt (OPIS Carbon Market Report)

Excerpt from OPIS Carbon Market Report: OPIS assessed the Washington Carbon Allowance (WCA) forward price at $43/mt on Tuesday – as bids and offers remained at impasse for the newly minted cap-and-trade compliance instrument.

The Washington Cap-and-Invest Program started on Monday, marking the success of legislative work that began more than five years ago. OPIS launched WCA price assessments on Tuesday in connection with the program implementation.

The WCA January 2023 assessment at $43/mt matched the price of the last trade -- done Thursday -- on the Nodal Exchange WCA V23
December 2023 futures contract. On Tuesday, the contract was bid at $35/mt and offered of $48/mt – representing a relatively wide, $13/mt, range. The bid-side Tuesday equaled the first trade deal on the contract of $35/mt on Dec. 5, the day it began trading.

For comparison, OPIS assessed the long-established California Carbon Allowance (CCA) V23 December 2023 price at $30.025/mt. Washington state's inaugural quarterly cap-and-trade auction will take place Feb. 28, 2023, with 6.2 million WCAs on offer, the state's
Department of Ecology announced last month. The state's 2023 auction reserve price (ARP) is $22.20/mt. READ MORE

Excerpt from San Diego Union Tribune: The average price in the Evergreen State has gone up more than $1 a gallon since the start of the year --

It may be cold comfort for motorists in California who already pay plenty whenever they go to the gas station but the state of Washington has overtaken the Golden State for the highest price for a gallon of gasoline in the country.

Gas prices in Washington have been climbing for months and on Tuesday the statewide average came to $4.825 for a gallon of regular, exceeding California by little more than a penny, according to GasBuddy.com.

The prices in the Evergreen State have soared more than $1 per gallon since the start of this year, which coincides with the state implementing a cap and trade program.

The average price for gasoline in Washington is up 25 cents per gallon in the past month and 4 cents this week, enough to displace California from the No. 1 spot.

Inslee’s office defended Washington’s cap-and-invest program, saying $2.1 billion in money raised from the program will be disbursed into the state budget for climate resilience investments, renewable energy infrastructure and cleaner transportation and energy options.

“There is more speculation than substance in this debate when it comes to costs for consumers,” Jaime Smith, Inslee’s executive director of communications said in an email. “It is too soon to accurately assess the policy’s price impacts. Gas prices fluctuate widely due to a variety of factors.”

Smith said diesel prices have not changed much in Washington since the beginning of the year and took a shot at gasoline producers.

“No one is surprised that rapacious oil companies experiencing record profits are choosing to pass their compliance costs to customers — sometimes even for fuels that are exempt under the law,” she said.

But the rise in gas prices in Washington has led to complaints, with the Seattle Times reporting that Native American tribes were irritated after Inslee rebuffed their call to exempt tribal gas stations from the Climate Commitment Act and the state’s Clean Fuel Standard. READ MORE