26 million California carbon allowances offered at auction
The California Air Resources Board will offer over 26 million carbon allowances at its next auction according to the group’s auction notice.
Over 16 million California carbon allowances for delivery in 2013 will put up for sale along with 9.5 million future 2016 CCAs.
In this past September’s auction, the ARB saw all of its future 2016 California carbon allowances sell for the first time, demonstrating how regulated businesses are already planning ahead for their future emissions.
This year large businesses like power plants and fuel refineries had to begin tracking the emissions associated with their operations.
They must then purchase enough California carbon allowances and carbon offset credits to cover their total annual emissions.
With California carbon allowances currently trading above $12, regulated companies will look to take advantage of the cost savings of carbon offset credits.
Carbon offset credits are emission reductions that have taken place in accordance with one of the ARB-approved project protocols.
The ARB has only approved a few project types, including Forestry, to provide carbon offset credits to the market.
However if businesses purchase offsets to meet the maximum 8% allowed by the ARB, the supply of offsets could fall as much as 67% short of demand.