The base case scenario of our updated price forecast maintains the assumption that Supply Option 1 of the California Air Resources Board (CARB) will be adopted. However, it now assumes California will not be able to enforce its ban on sales of vehicles with an internal combustion engine (ICE) from 2035. Taking into consideration the current delays in CARB’s regulatory reform process, we now assume the new supply caps take effect from 2027 rather than from 2026. Despite the new scenario’s higher demand from the slower rate of decarbonization in the transportation sector resulting from the new barriers to electric vehicle (EV) adoption, the additional allowance supply from delays in the reform process reduces our forecasted 2030 allowance price by 8%.