Key facts
- Indonesia will issue over 30 million tonnes of CO2 equivalent forestry carbon credits on July 6.
- The issuance is expected to weigh on the prices of Indonesian forestry carbon credits.
- U.S. Gulf Coast renewable diesel producers are shifting sales to Texas.
- This shift is due to slowing demand in California.
- Record U.S. renewable diesel output is a contributing factor to the shift.
- Texas's excise tax abatement makes renewable diesel competitive with conventional ULSD.
Indonesia is preparing to issue more than 30 million tonnes of CO2 equivalent forestry carbon credits on July 6, as announced by Forestry Minister Raja Juli Antoni. This substantial issuance is projected to exert downward pressure on the market prices of Indonesian forestry carbon credits. The move signifies a major development in Indonesia's efforts to leverage its forestry sector for carbon market participation.
Concurrently, the U.S. is witnessing a geographical shift in renewable diesel sales. Producers along the U.S. Gulf Coast are increasingly directing their output towards Texas, a change attributed to a slowdown in demand from California. This redirection is also occurring amidst record levels of U.S. renewable diesel production. The economic viability of renewable diesel in Texas is enhanced by the state's excise tax abatement program, which effectively makes it more competitive when compared to conventional ultra-low sulfur diesel (ULSD). This policy aims to encourage the use of cleaner fuels within the state.