Carbon Auction Reaches Record $17.45 Settlement Price
California experienced more record-breaking success during its May Carbon Allowance (CCA) auction.
Current vintage CCAs reached a settlement price of $17.45, shattering the previous record of $15.73. All 66.3 million available current vintage CCAs sold out, with the highest bid ratio seen since 2017. The secondary market has experienced a price spike in recent months, due to increased demand stemming from rising speculator engagement. This trend was reflected in the auction, as only 86% of the CCAs were purchased by compliance entities, the lowest proportion since auctions began in 2012.
The auction for future vintage CCAs to be used beginning in 2022 also set a new price record at $17.40 per CCA, crushing the previous high of $15.62. All 9.0 million CCAs sold out, generating revenues of $157 million.
In one of the most successful auctions to date, a combined 75.3 million CCAs were sold, producing revenues of over $1.3 billion. Since launching in 2012, auctions have generated more than $21.3 billion to be used to fund emission reduction projects, offset potential increases in utility costs, and improve air quality.