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Calif. board reports 2015 carbon allowance transfers


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Calif. board reports 2015 carbon allowance transfers

Data released Dec. 9 by the California Air Resources Board show 29,417,240 vintage year 2014 and 112,920,654 vintage year 2015 priced carbon allowances were transferred in the Compliance Instrument Tracking System Service by entities registered in California and Quebec in 2015.

The CARB yearly data shows that 248 transfers of vintage year 2014 carbon allowances occurred at an average price of $12.62/tonne. With 444 transfers taking place, the vintage year 2015 carbon allowances posted an average price of $12.68/tonne.

The CARB data also indicate that 116 transfers of 8,158,229 vintage year 2014 carbon allowances and 142 transfers of 16,812,552 vintage year 2015 allowances took place at unpriced levels. According to the CARB, transactions that are unpriced include transfers between corporate associates or deals that bundle compliance instruments with other products.

Formally linked in 2014, the California and Quebec cap-and-trade systems cover emissions from utility and industrial facilities, which emit more than 25,000 tonnes of carbon each year. Those facilities must purchase either state carbon allowances or carbon offsets to account for their annual emissions under the annual emissions cap.

Carbon allowances are sold at quarterly auctions. Up to 8% of an entity's emissions can be covered using offset credits from certified projects. Carbon offset credits, as well as carbon allowances, can be purchased in the secondary market.

As of the Nov. 1, 2015, deadline, entities under California's carbon cap-and-trade program had met 99% of their annual obligations for the first compliance phase of the cap-and-trade program, the agency noted in early November. From Jan. 1, 2013, through the end of 2014, total covered emissions totaled approximately 290.7 million tonnes.

The first phase of the program included all major industrial sources, along with electric utilities. The second phase of the cap-and-trade program kicked off in January 2015 and brought in distributors of transportation fuels and natural gas under the caps. The second compliance period ends Dec. 31, 2017.

Under the cap-and-trade program in the state, 2015 was the first year of the second multiyear compliance period of 2015-2017. The agency developed multiyear compliance periods to provide entities with more flexibility for compliance.

Covered entities in California must surrender a sufficient amount of carbon allowances and offsets to cover 30% of their obligations for the first years in each multiyear compliance period, which is 2015 and 2016. For the last year in a compliance period, entities must cover all remaining emissions for all years of the compliance period.