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LCFS market mulls CARB rethink on proposed CI pathways

 

LCFS credit values walked up slightly to $66.75 with the best bid staying at $66 and the best offer at $68.5 amid unconfirmed rumors of a trade at 66.50 or higher just two days before the results of California’s LCFS reconfirmation vote come in. RINs have been traded actively in the past few days as a widening D5/D6 spread continues to favor Brazilian ethanol imports.

LCFS administrator CARB yesterday released its new proposed final regulation order, which contains some changes to proposed CI values for different fuel pathways which, if adopted, could alter California’s biofuel landscape. Under the new proposal, gasoline and diesel suppliers will be required to make hefty cuts in the intensity of their carbon emissions by 2020. Renewable fuel suppliers meanwhile are busy analyzing the proposal to see if their own pathways have gained or lost any advantage under the tweaked methodology and its revised interpretations of ILUC factors. Corn ethanol producers will be cheered by initial signs of a big downgrade to rival sugarcane’s CI advantage based on ILUC calculations. Brazilian exporters have been keenly eyeing opportunities into the US west coast as after LCFS ticket prices surged this summer.

sep 22 price graph

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