Offset Pricing Monthly Market Digest – April 2019

Offset Supply Information:

All CCOs issued to date: 152.72 million
Compliance credits awaiting issuance: 21.69 million

CA and General Market Commentary:

A light month of ARB CCO issuances saw the ROC backlog increase to 21.69 million, up almost 4 million from March.

On April 8^th, the Intercontinental Exchange (ICE; theice.com) listed and traded the first California Carbon Offset futures contract. ClimeCo was pleased to be involved in this historic trade.  The contract is for the physical delivery of CCO-0s- offsets whose invalidation period has expired.  The first trade was for delivery of CCO0s in December 2021 and was priced at $16.66.  Following up on this previously reported event, we are now listing the monthly settlement price for the DEC2021 contract for CCO-0s in our pricing table above.

ARB’s second quarterly auction of 2019 will be held on May 14^th, with results available May 22^nd. We will look to see whether the substantial move upward in allowance prices during the last few weeks is sustained by the auction results, or whether the auction clears close to the 2020 floor price of ($16.70 estimated) as typically has occurred in the past.