Secondary market prices for carbon dioxide allowances under the Regional Greenhouse Gas Initiative stumbled in value to kick off the new month.
Broker data as of Dec. 6 showed the benchmark December 2017 vintage 2017 contract was assessed in a bid-and-ask range of $3.82/ton to $4.10/ton, easing 23 cents from the week prior.
The December 2018 vintage 2018 contract was quoted in a bid-and-offer spread of $3.92/ton to $4.22/ton as of Dec. 6, declining 23 cents as well on the week.

The RGGI states held their last quarterly allowance auction of the year Dec. 6, offering about 14.7 million CO2 allowances for sale. The offering was made up of allocation year 2017 CO2 allowances as well as 88,808 allocation-year 2015 and 227,595 allocation-year 2016 allowances from state set-aside accounts. Results of the auction will be released at 10:00 a.m. ET on Dec. 8.
At RGGI's September auction, 100% of the almost 14.4 million allowances on offer were purchased at a clearing price of $4.35/ton. The clearing price soared $1.82, or almost 72%, from the program's June auction price of $2.53/ton, which was the lowest recorded since December 2012.
Over-the-counter prices for RGGI CO2 allowances spiked to around $4.50/ton at the end of August when the nine RGGI states announced proposed program changes, including a cut to the emissions ceiling by an additional 30% by 2030, relative to 2020 levels.

Under the proposal, the RGGI cap would decline by 2,275,000 tons of CO2 per year, from 2021 through 2030, yielding a total reduction of 22,750,000 tons of CO2, or 30%, of the 2020 cap.
Other proposed changes to the RGGI program as part of the recent review include the implementation of an emissions containment reserve, or ECR, after 2020. The ECR would allow states to hold a portion of their annual emissions allowances in reserve, restricting the sale of those allowances when prices fall below certain predetermined levels.
The states implementing the ECR will withhold up to 10% of the allowances in their base budgets each year. Allowances withheld in this way will not be reoffered for sale. The ECR trigger price will be $6.00/ton in 2021 and will rise at 7% per year. RGGI said that Maine and New Hampshire do not intend to implement an ECR.
RGGI is made up of nine states: Connecticut, Delaware, Maine, Massachusetts, Maryland, New Hampshire, New York, Rhode Island and Vermont. They 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.
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.
