California’s LCFS market kept above its historical $100 high on Thursday as offers pulled back to between $105-110 against bids in a $95-98 range, leaving PRIMA’s LCFS Index to finish the session valued at $101 in the absence of any fresh reported trades.
CARB on Friday hosts its workshop to explain its new generic CI pathways and firm up the compliance schedule for next year. Correct interpretation of the new pathways will help determine prospects for Brazilian sugarcane imports, which are currently suffering from high Brazilian prices, with LCFS levels still too low to push the arbitrage back into the black. Brazil anhydrous spot prices are already at $1.90/gal with expectations they could soon hit $2.10/gal after recent heavy rains interrupted the crush. The same rains could hike next year’s harvest, which would improve sugar cane ethanol’s chances of substituting for higher CI corn ethanol into California next summer, particularly if strong LCFS prices meet a wider D5/D6 RIN spread.