Glossary

Offset Pricing Monthly Market Digest – August 2021

Offset Pricing Monthly Market Digest – August 2021

Offset Pricing Monthly Market Digest – August 2021

Offset Supply Information:

All CCOs issued to date: 224.91 million

Compliance credits awaiting issuance: 16.06 million

CA and General Market Commentary:

  • Results for the August CCA auction were announced on August 25th. Current vintage CCAs cleared at a record-high price of $23.30, $5.59 over the 2021 auction floor price. The bid-to-cover ratio was a high 1.85, and 32.5% of the allowances were purchased by speculators rather than compliance entities.
  • Offset (CCO) prices moved upward as well during
    August, but the spread between CCO-0s and CCAs increased to a 35% discount to allowances, a new record high discount %.

ClimeCo is a respected advisor, transaction facilitator, and trader of environmental commodity market products and related services. We specialize in voluntary carbon, regulated carbon, renewable energy credits, plastics credits, and regional criteria pollutant trading programs.  Complimenting these programs is a team of professionals skilled in providing sustainability program management services, and developing and financing of GHG abatement and mitigation systems.

For more information or to discuss how ClimeCo can drive value for your organization, contact us at 484.415.0501, info@climeco.com, or through our website climeco.com. Be sure to follow us on LinkedIn, Facebook, Instagram, and Twitter using our handle, @ClimeCo.

Offset Pricing Monthly Market Digest – August 2021

Offset Pricing Monthly Market Digest – August 2020

Offset Pricing Monthly Market Digest – August 2020

Offset Supply Information:

All CCOs issued to date: 190.88 million

Compliance credits awaiting issuance: 21.96 million

CA and General Market Commentary:

  • ARB’s August auction saw a $16.68 clearing price for its current vintages, with a bid-to-cover ratio of 0.89. The advance vintage auction cleared at $16.73 with a bid-to-cover ratio of 1.29.  This is an unusual result, typically entities would expect to receive a discount for purchasing future years’ allowances that cannot be used for 3 years.  It was also interesting to see that while only 3.5% of current vintage allowances were purchased by speculators, 19.9% of future vintage allowances were purchased by speculators.
  • Allowances continued to inch higher in August, while CCO prices inched lower. The spread between Allowance and CCO is historically high.  Because 2020 is not 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, and many entities may be waiting until closer to the true-up deadline in order to observe the uncertain economy and better understand their emissions for 2020.

ClimeCo LLC is a respected project developer, advisor and trader of environmental commodity market products. Specialized expertise in regional criteria pollutant trading programs, California cap‐and‐trade, voluntary markets and project development and financing of internal CO2 abatement systems complement ClimeCo’s diverse commodity portfolio. Within the Climate Action Reserve, ClimeCo is the largest developer of U.S. GHG‐offset projects and producer of U.S. voluntary carbon offsets, managing projects that reduce more than four million tonnes of CO2e per year. For information, contact 484‐415‐0501 or nmarshall@climeco.com.

Offset Pricing Monthly Market Digest – August 2019

Offset Pricing Monthly Market Digest – August 2019

Offset Pricing Monthly Market Digest – August 2019

Offset Supply Information: 

All CCOs issued to date: 161.49 million 

Compliance credits awaiting issuance: 26.07 million 

CA and General Market Commentary: 

  • On August 27th, the California Air Resources Board announced the results of the 20th quarterly Joint Auction.  Current vintage allowances cleared at $17.16, a premium of $1.54 over the auction floor price for 2019 of $15.62.  The auction had a bid-to-cover ratio of 1.49.  87% of the current vintage allowances were purchased by compliance entities. 

ClimeCo Corporation is a respected project developer, advisor and trader of environmental commodity market products. Specialized expertise in regional criteria pollutant trading programs, California cap‐and‐trade, voluntary markets and project development and financing of internal CO2 abatement systems complement ClimeCo’s diverse commodity portfolio. Within the Climate Action Reserve, ClimeCo is the largest developer of U.S. GHG‐offset projects and producer of U.S. voluntary carbon offsets, managing projects that reduce more than four million tonnes of CO2e per year. For information, contact 484‐415‐0501 or nmarshall@climeco.com.

Offset Pricing Monthly Market Digest – August 2019

Offset Pricing Monthly Market Digest – August 2018

Offset Pricing Monthly Market Digest – August 2018

Offset Supply Information:

All CCOs issued to date: 116.71 million
Compliance credits awaiting issuance: 33.39 million

CA and General Market Commentary

Offset prices climbed in August even further to historically elevated levels, but with an important caveat- the prices shown for offsets above are for offsets that can be delivered before the November 1st triennial compliance deadline. This year is of particular importance, as entities are going to be completing their final submissions for the full 3-year 2015-2017 triennial period.

On September 4th, ARB released their Proposed Amendments to the Cap and Trade Program. Included in this release were minor changes to the process for registering and issuing offset credits and some significant changes related to Allowances.  In particular, ARB has introduced new mechanisms to protect against rapid increases in compliance prices.  ARB proposes a price ceiling which starts in 2021 at $65, and two Reserve Tier price levels that we refer to as “speed bumps”, which begin in 2021 at $41.40 and $53.20.  Reserve Tiers are prices at which the ARB would inject additional allowances into the market, via a special auction.  The Reserve Tiers, and the ceiling, effectively attempt to set maximum price expectations in the program for the period 2021-2030.  Both the Reserve Tiers and the Price Ceiling, escalate at 5% per year plus CPI-U, in line with the escalation of the auction price floor.

ClimeCo Corporation is a respected project developer, advisor and trader of environmental commodity market products. Specialized expertise in regional criteria pollutant trading programs, California cap‐and‐trade, voluntary markets and project development and financing of internal CO2 abatement systems complement ClimeCo’s diverse commodity portfolio. Within the Climate Action Reserve, ClimeCo is the largest developer of U.S. GHG‐offset projects and producer of U.S. voluntary carbon offsets, managing projects that reduce more than four million tonnes of CO2e per year. For information, contact 484‐415‐0501 or nmarshall@climeco.com.