California and Quebec will offer more than 58mn allowances in the first carbon auction of 2025 in February, the market partners said today.
The joint carbon market, known as the Western Climate Initiative (WCI), will offer in its 19 February auction just under 51.5mn vintage 2025 California carbon allowances (CCAs) starting at $25.87/metric tonne (t).
Regulators will also make available more than 6.8mn t vintage 2028 CCAs in an advance auction, also starting at $25.87/t.
The current year auction pool is about 0.5pc higher than the February 2024 auction offering of 51.2mn t of vintage 2024 allowances but 2.1pc lower than the most recent program auction in November, which made available 52.5mn allowances.
Within the advance auction offerings, total CCAs are 5pc lower than the February & November 2024 advance auction offerings of 7.2mn vintage 2027 CCAs respectively.
The WCI auctions started the year with a record high clearing price in the February auction of $41.76/t for the current year auction and $41/t for the advance year as participants staked out a bullish outlook for the ongoing program rulemaking, which regulators planned to finish around the second half of 2024.
The California cap-and-trade program, which covers major sources of the state's GHG emissions, including power plants and transportation fuels, requires a 40pc cut from 1990 levels by 2030. But regulators are eyeing tightening that target to 48pc as part of its rulemaking.
But auction prices dwindled over much the year as delays continued in finalizing rulemaking, with the August program auction clearing at a 14-month-low for current year auction at $30.24/t. The advance auction settled at $29.75/t, its lowest since February 2023.
California and Quebec plan to publish their package of rulemaking amendments in early 2025, with Quebec estimating it will implement its portion of program changes in spring of that year.
Both parties expect to release the results of their next auction on 26 February.
The market partners are also planning further carbon auctions on 21 May, 20 August and 19 November.
