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Secondary market prices for Calif. carbon allowances fizzle in light trading

In light trading, secondary market prices for California carbon allowances slipped to end January amid lackluster buying interest.

As of Jan. 30, the February 2018 vintage 2018 California carbon contract was pegged in a bid-and-offer spread of $14.90/tonne to $14.93/tonne. The March 2018 vintage 2018 California carbon contract saw a bid-and-ask range of $14.93/tonne to $14.99/tonne, down 5 cents on the week.

As of Jan. 30, the benchmark December 2018 vintage 2018 California carbon contract was quoted in a bid-and-offer spread of $15.30/tonne to $15.36/tonne, easing 3 cents from the week before.

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Market participants are awaiting firm market direction ahead of the next quarterly carbon allowance auction held by the Western Climate Initiative, or WCI. The WCI is made up of California, Quebec and new member Ontario.

The auction will take place Feb. 21 and will offer a total of 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 previous 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, natural gas index prices, as well as forwards and futures, visit our Commodities pages.