Offset Pricing Monthly Market Digest – May 2020

by | Jun 8, 2020

Offset Supply Information:

All CCOs issued to date: 186.06 million
Compliance credits awaiting issuance: 23.48 million

CA and General Market Commentary:

  • ARB issued 11.6 million CCOs in May, a relatively high monthly total that substantially reduced the ROC backlog from 32.84 million last month to 23.48 million this month.
  • ARB announced the results of the May CCA auction on May 28th. The auction for both current and future vintage CCAs failed to sell out, so the clearing price was the minimum reserve price of $16.68.  The bid-to-cover ratio was .37, meaning that 37% of the auctioned current vintage allowances sold.  Given that CCAs on the futures market had traded below $16.68 during April and May, it was to be expected that entities would have limited need to purchase CCAs at this auction.
  • ARB’s next auction will be in August, and with CCA futures trading above the auction reserve price currently, a more fully-subscribed auction is likely in August.

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