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Calif. carbon allowance prices rebound after post-auction decline

Following recent losses after the latest Western Climate Initiative quarterly auction, secondary market prices for California carbon allowances edged higher.

As of March 21, the March 2018 vintage 2018 California carbon contract was quoted in a bid-and-ask range of $14.70/tonne to $14.95/tonne, up 5 cents from prior assessments.

SNL Image

SNL Image

Broker data as of March 21 shows the benchmark December 2018 vintage 2018 California carbon contract was assessed in a bid-and-offer spread of $15.20/tonne to $15.30/tonne, increasing 4 cents from earlier in the month.

In the Feb. 21 auction held by the Western Climate Initiative, or WCI, which includes California, Quebec and Ontario, 100% of the more than 98.0 million current vintage allowances sold at US$14.61/tonne, or 8 cents above the 2018 price floor of US$14.53/tonne.

More than 8.5 million, or 69%, of the more than 12.4 million vintage 2021 carbon allowances were also purchased at US$14.53/tonne.

In the WCI's November 2017 auction, which included allowances from California and Quebec only, 100% of the more than 79.5 million current vintage allowances sold at a record high of US$15.06/tonne, or $1.49 above the 2017 price floor of US$13.57/tonne. Also, 100% of the more than 9.7 million vintage 2020 carbon allowances were purchased at US$14.76/tonne in the November 2017 auction.

Under the WCI, the California and Quebec cap-and-trade programs were formally joined at the start of 2014, with their first joint auction held in November 2014. Ontario became the third member of the WCI on Jan. 1, 2018, allowing the three governments to hold combined auctions under the program.

Market prices and included industry data are current as of the time of publication and are subject to change. For more detailed market data, including power and natural gas index prices, as well as forwards and futures, visit our Commodities pages.