In the Regional Greenhouse Gas Initiative's second quarterly auction of the year, 100% of the carbon dioxide allowances on offer were purchased at a clearing price of $4.02/ton.
Results of the June 13 sale were released June 15 and showed the clearing price was up 23 cents from the prior RGGI auction price of $3.79/ton.
June auction bids ranged from a low at the market reserve price of $2.20/ton to a high of $6.00/ton. There were 43 bidders, with the ratio of bids coming in at 3.1 times the total amount of allowances.
RGGI said 36% of the allowances sold in the June auction were bought by compliance entities or their affiliates. Compliance-oriented entities also purchased 36% of the allowances.
The auction RGGI clearing price was not high enough to trigger the sale of allowances from the cost containment reserve. The cost containment reserve is a fixed additional supply of allowances that are only available for sale if CO2 allowance prices exceed certain price levels: $10.25/ton this year and rising by 2.5% each year thereafter to account for inflation.
The latest RGGI auction netted more than $55 million for the participating states. Cumulative proceeds from all of the RGGI's 40 allowance auctions to date total $2.94 billion.
The RGGI states consist of Connecticut, Delaware, Maine, Massachusetts, Maryland, New Hampshire, New York, Rhode Island and Vermont. The nine states use a market-based cap-and-trade program to reduce greenhouse gas emissions from regional power plants, selling nearly all emissions allowances through auctions and investing proceeds in energy efficiency projects.
The 2017 model rule, released in December 2017, sets a 30% reduction in regional carbon dioxide emissions between 2020 and 2030.
