Washington, 9 October (Argus) — California regulators have put allowances into the accounts of the state's public and investor-owned utilities and have enabled trading in the physical market for the state's greenhouse gas cap-and-trade program.
However it will still be the better part of a month before there are any allowances in the tracking system that can be traded. Allowances were given to the state's electric utilities last night, according to market sources, but those allowances are sequestered in utilities' limited-use holding accounts until they can be auctioned.
But the allocation and the enabling of the tracking system's market functions are key hurdles that the state Air Resources Board had to clear before the program's first allowance auction on 14 November and the start of the cap-and-trade program's first compliance period in 2013.
The first allowances that can be traded will be those scheduled to be given to the industrial and refinery sectors by 1 November. However, Air Resources Board chairwoman Mary Nichols said recently that some data quality issues affecting the allocation for specific industrial entities have cropped up and may need to be ironed out before those allowances are issued.
California Carbon Offsets will also be kept and transferred through the state's tracking system, but the regulator has yet to approve any offset verifiers. The state plans to formally recognize the first approved verifiers this fall, at which point developers can begin the potentially lengthy process of getting an offset project verified and approved.
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