60,000 California carbon allowances trade
60,000 California carbon allowances for delivery in 2013 traded over the week.
Over the past few weeks California carbon allowance volumes have traded in record numbers, with millions of CCAs for delivery in 2013 and 2016 exchanging hands.
The shortened week due to Labor Day likely had an effect on the amount of CCAs trading.
Prices for 2013 California carbon allowances were up, reaching a price of $12.80.
Market participants are now looking ahead to the California Air Resources Board’s meeting in October when they will vote on amendments to the market regulation.
The ARB has been considering allocating additional free CCAs to businesses at risk of relocating their operations out-of-state.
Other proposed changes include approving another carbon offset project protocol to help bolster the supply of carbon credits.
ARB is expected to add the Coal Mine Methane protocol to their current approved project types – Forestry, Livestock Methane, and Ozone Depleting Substances.
Regulated businesses in California that must account for their annual emissions will be able to purchase carbon credits generated from these protocols to meet up to 8% of their compliance obligation.
Despite the potential demand for over 200 million carbon credits by 2020, a report by the American Carbon Registry, one of two Offset Project Registries approved by the ARB, demonstrated a severe shortfall in supply by as much as 67% by the end of the decade.
Companies will be eager to acquire any available carbon credits since they act as market cost containment mechanisms that are typically offered at a discount to California carbon allowance prices.
Earlier this year Shell Energy announced the purchase of 500,000 carbon credits that will be eligible for use in the California market.
Only 62 Early Action carbon projects have been listed on the ARB website as of this Wednesday, hinting at the relatively small number of available offsets for the California carbon market which is valued at over $1 billion.
(9/6/13)