Glossary

Offset Pricing Monthly Market Digest – October 2021

Offset Pricing Monthly Market Digest – October 2021

Offset Pricing Monthly Market Digest – October 2021

by Derek Six | November 8, 2021


Offset Supply Information:

All CCOs issued to date: 229.31 million

CA and General Market Commentary:

  • CCA prices continued to climb in October, while CCO prices were largely stable.
  • November 1st was the deadline for compliance true-up for the 2018-2020 triennial compliance period. Some hurried buying of CCOs for compliance optimization was noted, but the significant price changes and demand crunch that occurred during the last triennial compliance period did not appear to occur.

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 – October 2021

Offset Pricing Monthly Market Digest – October 2020

Offset Pricing Monthly Market Digest – October 2020

Offset Supply Information:

All CCOs issued to date: 205.31 million

Compliance credits awaiting issuance: 17.55 million

CA and General Market Commentary:

The multi-month trend of allowances moving higher and CCO prices moving lower continued in October. The spread between Allowances and CCOs continues to widen to record historical levels.  Because 2020 is not a 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.

The ROC backlog dropped by approximately 6 million CCOs in October as ARB issuances of credits were much higher than average.

The next quarterly allowance auction will be held on November 17th, 2020, with results to be announced November 24th. While the previous auction did not clear and allowances were sold at the floor price of $16.68, we expect the last auction of the year to clear, as typical, and the clearing price to trend higher as participants begin to anticipate the higher 2021 floor price.  ClimeCo estimates the clearing price for 2021 at $17.73, based on estimates of inflation for the 12 months ending October 31st, 2020.


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 – October 2019

Offset Pricing Monthly Market Digest – October 2019

Offset Pricing Monthly Market Digest – October 2019

Offset Supply Information:

All CCOs issued to date: 164.23 million
Compliance credits awaiting issuance: 25.27 million 

CA and General Market Commentary:

  • On November 4th, ARB released the 2018 Emissions Report. Emissions for sources covered by the Cap and Trade Program decreased by 0.2% from 2017.  Reported emissions were 319.9 million MtCO2e, versus a cap of 358.3 million MtCO2e.
  • Through 2018, the surplus of allowances continued to grow, because actual emissions in 2018 were less than the 2018 allowance budget.
  • However, it is interesting to note that if actual emissions continue to decline by only 0.2%/year going forward, then in 2022, emissions will exceed the cap for the first time, and surplus allowances in the market would begin to be drawn down.

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 – October 2019

Offset Pricing Monthly Market Digest – October 2018

Offset Pricing Monthly Market Digest – October 2018

Offset Supply Information:

  • All CCOs issued to date: 139.78 million
    Compliance credits awaiting issuance: 14.04 million
    CA and General Market Commentary:
  • Prices for offsets dropped dramatically at the end of the month, as the deadline passed for entities completing their final submissions for the full 3-year 2015-2017 triennial period (CP2). While prices for CA Allowances were up $0.08 from September, CCOs dropped $0.30-$0.40.  This reaction was to be expected, as buyers of offsets today will not need them for compliance until October 2019.

The backlog of compliance credits awaiting issuance dropped dramatically as ARB apparently expended significant energy to issue to CCOs prior to the November 1st deadline for CP2 compliance. Only 1.3 million new ROCs were registered and added to the backlog during October, while ARB issued 20.91 million CCOs, reducing the backlog by a net 19.6 million ROCs.

Three potential market-moving events are on the horizon:

  • On November 14th, ARB will hold its last quarterly allowance auction for 2018, and results will be announced on November 21st.  The clearing price for the last auction, held in August, was $15.05.  Last year, auction clearing prices ticked upward throughout the year, with November’s auction settling well above the anticipated floor price for the next year.
  • On November 15th, the Board of ARB will hold a public meeting to discuss proposed amendments to the Cap and Trade Regulation.  Meeting announcement and supporting documents can be viewed here: https://www.arb.ca.gov/regact/2018/capandtrade18/capandtrade18.htm
  • On December 1st, ARB will announce the auction reserve (floor) price for 2019 auctions. 

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.