Glossary

Offset Pricing Monthly Market Digest – November 2021

Offset Pricing Monthly Market Digest – November 2021

Offset Pricing Monthly Market Digest – November 2021

by Derek Six | November 6, 2021


Offset Supply Information:

All CCOs issued to date: 231.13 million

CA and General Market Commentary:

  • The California Air Resources Board (ARB) has released the 2022 Auction Reserve Price. The auction floor price will be $19.70 for each of the four auctions held in 2022, up from the 2021 floor price of $17.71.  This increase is due in part to a 5% annual escalator, and in part to the large increase in inflation for 2021 as expressed in the CPI-U index change from November 2020 through October 2021.
  • November Auction Results- ARB announced on November 24th that the 4th quarterly auction had sold 68.6 million current vintage allowances at $28.26. The auction had a bid-to-cover ratio of 1.51.  3% of allowances were purchased by compliance entities, the rest were purchased by speculators and other intermediaries.

ClimeCo is a respected 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 – November 2021

Offset Pricing Monthly Market Digest – November 2020

Offset Pricing Monthly Market Digest – November 2020

Offset Supply Information:

All CCOs issued to date: 206.63 million

Compliance credits awaiting issuance: 17.55 million

CA and General Market Commentary:

  • A quarterly allowance auction was held on November 17, 2020, with results announced November 24th. Both current and future vintage auctions were over-subscribed.  Current vintage allowances cleared at $16.93 versus a floor price of $16.68, with a bid-to-cover ratio of 1.2.  Future 2023 vintages cleared at $17.35, with a bid-to-cover ratio of 1.37.  It is unusual to see the future vintages clear at a much higher price than the current vintage, as they cannot be used until 2023, and therefore should carry a lower price than current vintages.
  • ARB has also officially announced the 2021 auction reserve floor price of $17.71. This is the lowest price at which allowances can be purchased at auction at the four quarterly auctions which will occur in 2021. 
  • ClimeCo has begun providing our estimate of the 2022 floor price with an initial value of $18.86. This projection will be updated monthly as inflation data becomes available.


ClimeCo
 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 – November 2019

Offset Pricing Monthly Market Digest – November 2019

Offset Pricing Monthly Market Digest – November 2019

Offset Supply Information”

All CCOs issued to date: 165.31 million

Compliance credits awaiting issuance: 27.34 million

CA and General Market Commentary:

  • On December 2nd, ARB announced that the 2020 Auction Reserve (floor) price will be $16.68. This was in line with expectations.  Our chart above has been updated to reflect this 2020 floor price, and we have begun estimating the 2021 floor price at $17.85.
  • On November 18th, ARB announced that it had opened an Invalidation Investigation against Scenic View Dairy, project CALS5040. The project is an agricultural methane capture project located in Michigan and is operated by Scenic View Dairy, LLC.  36,118 credits are under investigation.  Information released by ARB regarding the investigation can be found here: https://ww3.arb.ca.gov/cc/capandtrade/offsets/notice.of.offset.investigation.11.18.19.pdf
  • This is the third invalidation investigation announced by ARB in the history of the program. Previous investigations occurred in 2014 and 2016.  One invalidation did result from the investigation in 2014, causing the invalidation of 88,955 credits.
  • The announcement of the investigation caused some limited concern among buyers, reminding them that invalidation is a possible risk, but the small quantity being investigated is unlikely to significantly impact the market.

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.