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Western Climate Initiative auction sees current vintage clear at US$14.61/tonne

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Western Climate Initiative auction sees current vintage clear at US$14.61/tonne

The latest quarterly greenhouse gas allowance auction held by the Western Climate Initiative, or WCI, which includes California, Quebec and Ontario, saw 100% of the more than 98.0 million current vintage allowances sell at US$14.61/tonne, or 8 cents above this year's price floor of US$14.53/tonne.

Results for the Feb. 21 auction, which were issued Feb. 28 by the California Air Resources Board, or CARB, also showed that more than 8.5 million, or 69%, of the more than 12.4 million vintage 2021 carbon allowances were purchased at US$14.53/tonne.

In the WCI's November 2017 auction, which included allowances from California and Quebec only, 100% of the more than 79.5 million current vintage allowances sold at a record high of US$15.06/tonne, or $1.49 above the 2017 price floor of US$13.57/tonne. Additionally, 100% of the 9,723,500 vintage 2020 carbon allowances were purchased at US$14.76/tonne in the November 2017 auction. Compliance entities purchased 92.1% of the current vintage allowances, which comprised vintage 2016 and vintage 2018 allowances, and bought 89% of the future vintage allowances in the February auction. Demand was strong, with the current vintage oversubscribed at a 1.21 bid-to-cover ratio.

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Under the WCI, the California and Quebec cap-and-trade programs were formally joined at the start of 2014, with their first joint auction held in November 2014. Ontario became the third member of the WCI on Jan. 1, 2018, allowing the three governments to hold combined auctions under the program.

As of Feb. 27, at the over-the-counter market, the benchmark December 2018 vintage 2018 California carbon allowance contract was marked in a bid-and-offer spread of $15.29/tonne to $15.35/tonne, advancing 12 cents on the weekly period.

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