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Calif. carbon allowance prices reverse recent losses ahead of February auction

After recent weakness, California carbon allowance prices at the over-the-counter market edged up heading into the end of the month. During the week ended Jan. 23, the benchmark December 2018 vintage 2018 California carbon contract was assessed in a bid-and-offer spread of $15.30/tonne to $15.36/tonne, gaining 5 cents on the week.

The January 2018 vintage 2018 California carbon contract was seen in a bid-and-ask range of $14.94/tonne to $14.97/tonne, rising 6 cents week over week. The March 2018 vintage 2018 California carbon contract was quoted in a bid-and-offer spread of $14.96/tonne to $15.06/tonne, up 3 cents from the week prior.

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Traders are looking ahead to the next carbon allowance auction to be held by Western Climate Initiative, or WCI, members California, Quebec and Ontario, which joined the collaborative Jan. 1.

The sale will be held Feb. 21 and will offer 98,215,920 current vintage allowances and 12,437,950 advance auction allowances. The current vintage offering will consist of 14,894,520 vintage 2016 allowances and 83,321,400 vintage 2018 allowances.

A reserve price of $14.53/tonne will be used in this year's WCI allowance auctions.

At the WCI's prior auction held Nov. 14, 2017, which included California and Quebec, 100% of the more than 63.6 million current vintage 2017 allowances sold at a record high of US$15.06/tonne, or $1.49 above the price floor of US$13.57/tonne and up from a clearing price of $14.75/tonne in the August 2017 sale. Additionally, 100% of about 9.7 million vintage 2020 carbon allowances were purchased at US$14.76/tonne.

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.