Calif. cap-and-invest program changes approved

Market: Electricity, Emissions, Oil products
31/08/26

A California agency approved a package of amendments to the state's cap-and-invest program today, clearing the changes to take effect on Tuesday, according to the California Air Resources Board (CARB).

The state Office of Administrative Law (OAL) "has approved this rulemaking action and filed with the Secretary of State" on Monday, CARB said. "[All] formal rulemaking documents will be uploaded [on the CARB website] by the end of the day."

As a result, the amendments to the program that sets a declining limit on greenhouse gas (GHG) emissions from sources like power plants and transportation fuels will go into effect on 1 September, the agency said.

The program amendments were adopted by CARB in May, and include tighter allowance budgets as well as a much-criticized manufacturing decarbonization incentive (MDI).

OAL's final decision ends a weeks-long wait by market participants for the fate of CARB's rulemaking package, the result of a process to update the state's carbon market that began in mid-2023. OAL did not respond to requests to confirm its decision on the rulemaking package.

The approval comes more than a week after CARB resubmitted its package to OAL in order to align the evaluation period with that for another rule, which addresses California's mandatory greenhouse gas reporting program. OAL said at the time that it still plans to issue a decision before CARB's proposed 1 September implementation date.

CARB did not immediately respond to requests for comment about the next steps after the amendments go into effect.

California Carbon Allowances (CCAs) rose as high as $34.20/metric tonne (t) on Ice, up from $33.50-33.70/t about an hour before CARB announced OAL's approval of the rulemaking package. Argus last assessed prompt-month and December 2026 CCAs at $32.82/t and $33.33/t, respectively, on 28 August.

In addition, Washington Carbon Allowances (WCAs) last traded in the afternoon at $53.70/t on Ice, down from around $54.40/t just before OAL's approval was announced. OAL's decision could fuel optimism over the status of Washington's efforts to link with the larger California-Quebec carbon market, known as the Western Climate Initiative (WCI). Both California and Quebec have expressed a preference to complete the rulemakings for their respective programs before moving on with linkage.

WCAs for prompt-month and December 2026 delivery were last assessed by Argus at $54.55/t and $55.05/t, respectively, on 28 August.

Linkage with the more-liquid WCI market before Washington's November 2027 compliance deadline would likely help address ongoing supply concerns in the Washington market and help compliance entities in the state to use the relatively less expensive WCI compliance instruments for their 2023-26 obligations.

By Ida Balakrishna

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11/10/26

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New strike on Riyadh airport kills 12, injures 309

11/10/26

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11/10/26

New strike on Riyadh airport kills 12, injures 309

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Voluntary biodiesel use furthers Brazil climate goals

09/10/26

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09/10/26

Voluntary biodiesel use furthers Brazil climate goals

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09/10/26

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09/10/26

Assembly talks key to Venezuela elections: Rubio

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Germany opens tender for 1.1mn Article 6 carbon credits

09/10/26

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09/10/26

Germany opens tender for 1.1mn Article 6 carbon credits

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