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Calif. carbon allowance prices head higher after latest auction

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According to Market Intelligence, December 2022

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Calif. carbon allowance prices head higher after latest auction

At the secondary market, California carbon allowance values advanced during the first week of September following the Western Climate Initiative's latest quarterly allowance auction.

As of the week ended Sept. 4, the September 2018 vintage 2018 California carbon contract was marked in a bid-and-ask range of $15.36/tonne to $15.40/tonne, up 3 cents from the end of August. The benchmark December 2018 vintage 2018 California carbon contract was quoted in a bid-and-offer spread of $15.52/tonne to $15.56/tonne, up 10 cents from assessments made Aug. 21.

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The latest quarterly greenhouse gas allowance auction held Aug. 14 by the Western Climate Initiative, or WCI, saw 100% of the more than 79 million current vintage allowances sell out at US$15.05/tonne. This was up 40 cents from the previous auction-clearing price of $14.65/tonne.

Additionally, more than 9.4 million future vintage 2021 allowances were sold at $14.90/tonne, up 37 cents from the $14.53/tonne floor price in the prior quarterly auction.

At the WCI's prior auction in May, 100% of the more than 90.5 million current vintage allowances sold at $14.65/tonne, up 4 cents from the prior auction in February.

The California and Quebec cap-and-trade programs were joined under the WCI at the start of 2014, with their first collective auction taking place in November 2014.

Ontario became the third member of the initiative Jan. 1, which allowed the three governments to hold combined auctions under the program. However, newly elected Ontario Premier Doug Ford said in June that he intended to end the province's participation in the WCI, saying the government would not participate in the August auction.

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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 and coal index prices as well as forwards and futures, visit our Commodities pages.