Glossary

Offset Pricing Monthly Market Digest – May 2022

Offset Pricing Monthly Market Digest – May 2022

Offset Pricing Monthly Market Digest – May 2022

by Derek Six | June 7, 2022


Offset Supply Information:

All CCOs issued to date: 237.65 million

CA and General Market Commentary:

  • ARB released the results of its May auction on May 26th. Current vintage allowances cleared at $30.85, $11.15 above the reserve price of $19.70. The bid-to-cover ratio was 1.62.
  • The strong results of the auction propelled futures prices higher over the last few trading days in May.
  • Issuances of CCOs in 2022 through the end of May totaled 6.1 million. This is the lowest total recorded in this period, and continues a trend of decreasing issuances of CCOs:

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 – May 2022

Offset Pricing Monthly Market Digest – May 2021

Offset Pricing Monthly Market Digest – May 2021

 

Offset Supply Information:

All CCOs issued to date: 220.94 million

Compliance credits awaiting issuance: 14.13 million

CA and General Market Commentary:

  • On May 27th, ARB released the results of its quarterly allowance auction. Current vintage allowances cleared at $18.80, a substantial premium to the $17.71 auction reserve price.  The bid-to-cover ratio was 1.48, a strong result compared to auctions in 2020.
  • Issuances of CCOs continued to be slow in May. The ROC backlog increased by nearly 3 million.  Relatively low issuances of new CCOs continue to constrain the offsets available to entities as they look to fulfill their obligations at the 3-year compliance deadline on November 1st.

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 – May 2020

Offset Pricing Monthly Market Digest – May 2020

Offset Pricing Monthly Market Digest – May 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.

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 – May 2020

Offset Pricing Monthly Market Digest – May 2019

Offset Pricing Monthly Market Digest – May 2019

Offset Supply Information:

All CCOs issued to date: 154.78 million
Compliance credits awaiting issuance: 23.06 million

CA and General Market Commentary:

On May 22nd, ARB released the results of the second quarterly allowance auction for 2019. The clearing price for current vintage allowances was $17.45.  The auction cleared $0.76 over our estimate for the 2020 auction reserve price.  The auction was strongly subscribed with a bid-to-cover ratio of 1.46.  The result may be even more bullish than it appears considering that PG&E did not participate in the auction, likely due to PG&E’s ongoing bankruptcy negotiations.  As an entity with one of the largest compliance obligations in the program, their absence may lead to a later need to procure allowances.

Year-to-date, only 13.32 million offsets have been issued by ARB. If this issuance rate continues at a similar pace for the remainder of the year, 2019 would see only 32 million offsets issued.  That result would be a substantially lower annual issuance rate than the 54.17 million offsets issued in 2018.  

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.