News & Events

CA and General Market Commentary: 2021 will be an interesting year in the market, as full true-up for the 2018-2020 triennial compliance period is due on November 1st. Entities will be required to surrender all of their required allowances and offsets for their total 2018-2020 emissions at that time. ClimeCo anticipates rising CCO prices in 2021 as entities seek to acquire and surrender their 8% offset limits for the 2018-2020 period.

A quarterly allowance auction was held on November 17, 2020, with results announced November 24th. Both current and future vintage auctions were over-subscribed. Current vintage allowances cleared at $16.93 versus a floor price of $16.68, with a bid-to-cover ratio of 1.2. Future 2023 vintages cleared at $17.35, with a bid-to-cover ratio of 1.37.

The multi-month trend of allowances moving higher and CCO prices moving lower continued in October. The spread between Allowances and CCOs continues to widen to record historical levels. Because 2020 is not a triennial compliance true-up year, we believe the lack of interest in CCOs is because compliance entities do not need to purchase CCOs for compliance until 2021