Glossary

Offset Pricing Monthly Market Digest – July 2022

Offset Pricing Monthly Market Digest – July 2022

Offset Pricing Monthly Market Digest – July 2022

by Derek Six | August 8, 2022

 
Offset Supply Information:

All CCOs issued to date: 238.34 million

CA and General Market Commentary:

  • Issuances of CCOs in July totaled 506,768. This brings the issuances of CCOs in 2022 YTD to 6.8 million. This continues a trend of decreasing issuances of CCOs:


  • At least three factors may be at work influencing this severe downturn in CCO issuances: 
    1. Many of the largest potential forestry and ODS projects may have already been developed, and we may be observing a permanent decline in opportunities under the current protocols.
    2. The pandemic may have delayed the development of new projects and/or the process of verification site visits for existing projects.
    3. Many projects have elected to switch their registration.  Dairy methane projects have largely transferred over to the LCFS program.  Other projects may have elected to register under voluntary protocols given the high voluntary market prices seen in late 2021.

ClimeCo is a respected global advisor, transaction facilitator, trader, and developer 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 – July 2022

Offset Pricing Monthly Market Digest – July 2021

Offset Pricing Monthly Market Digest – July 2021

Offset Supply Information:

All CCOs issued to date: 223.38 million

Compliance credits awaiting issuance: 15.73 million

CA and General Market Commentary:

    • Allowance (CCA) prices continued their strong move upward. Offset (CCO) prices moved upward as well during July, and the spread between CCO-0s and CCAs declined slightly to a 31% discount to allowances, a 1% improvement of the spread in July, but still a record high discount %.
    • The next quarterly auction of allowances will occur on August 18, with results announced August 25.

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 – July 2020

Offset Pricing Monthly Market Digest – July 2020

Offset Pricing Monthly Market Digest – July 2020

Offset Supply Information:

All CCOs issued to date: 190.98 million
Compliance credits awaiting issuance: 23.12 million

 

CA and General Market Commentary:

  • ARB’s next auction will be in August. With futures for August delivery trading at $16.83, $0.15 above the $16.68 auction floor price, it appears likely that the auction will see a substantially higher bid-to-cover ratio than the .37 seen at the May auction.  It may even be fully subscribed (a bid-to-cover ratio of 1.00 or higher), but a clearing price materially higher than the minimum $16.68 floor seems unlikely given lower emissions in 2020 during the pandemic and given the large number of allowances that traded at a discount below the floor price on the futures exchange during the March-May period.
  • ARB has begun marking CCOs as “DEBs” or non-DEBs in their tracking software and reports. This allows buyers to know whether the credits they are buying have been determined to meet the requirements.  Offset projects that are located in California will automatically be marked as “DEBs”, while other projects can petition to have a determination made if the developer believes they should qualify.
  • Due to ARB beginning to mark credits as “DEBs”, we would expect that the market will begin to differentiate between the two categories, and we will begin adding prices for both categories to this report if/when the market begins to price them differently.

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 – July 2020

Offset Pricing Monthly Market Digest – July 2019

Offset Pricing Monthly Market Digest – July 2019

Offset Supply Information:

All CCOs issued to date: 157.88 million
Compliance credits awaiting issuance: 24.12 million

CA and General Market Commentary:

  • In July compliance offset prices continued to rise slightly despite a pull-back in CA allowance prices. This trend of increasing offset prices in the May-October timeframe is typical as we approach the interim compliance deadline and entities look to purchase a portion of their offset utilization limit.

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 – July 2020

Offset Pricing Monthly Market Digest – July 2018

Offset Pricing Monthly Market Digest – July 2018


Offset Supply Information:
All CCOs issued to date: 113.63 million
Compliance credits awaiting issuance: 32.71 million

CA and General Market Commentary:
• Offset prices have continued to remain at 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.

• ARB’s backlog of Registry Offset Credits (ROCs) increased slightly in July. Issuances in July continued to be modest. Several very large forestry projects have remained in the queue for an extended period.

• ClimeCo has again increased its estimate for the 2019 CA Auction Floor price for Allowances up to $15.68. This upward revision reflects recent US data showing that the CPI-U is on pace to be 2.8%-3.0% during the 2017-2018 period. The CA Allowance auction floor price escalates each year at the rate of 5% plus CPI-U.

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.