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WCA Schedule
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February 23, 2024 |
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March 6, 2024 |
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March 13, 2024 |
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- Q2 Auction Application Deadline
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May 6, 2024 |
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May 24, 2024 |
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June 5, 2024 |
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June 12, 2024 |
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- Q3 Auction Application Deadline
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August 5, 2024 |
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August 23, 2024 |
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September 4, 2024 |
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September 11, 2024 |
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- Q4 Auction Application Deadline
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November 4, 2024 |
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November 22, 2024 |
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December 4, 2024 |
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December 11, 2024 |
News Update
- Washington releases 2024 auction supply details. The Washington Department of Ecology (ECY) plans to offer 21 M state-owned vintage 2024 allowances in addition to 4.5 M state-owned vintage 2027 allowances across the state’s quarterly auctions in 2024. The supply of 25.5 M total allowances will be split almost evenly between this year’s auctions, with 5.26 M vintage 2024 allowances to be offered in each of the first 3 auctions, and 5.27 M allowances in the final auction of the year. The second and third auctions will also offer 2.2 M vintage 2027 allowances. While these totals do not account for allowances not owned by the state, the equal distribution of state-owned auction allowances could be part of ECY’s efforts to help alleviate costs as allowances traded up to $70 in 2023.
- Washington announces allowance supply for Q1 auction. ECY will offer nearly 7.4 M allowances in the first quarterly auction of the year scheduled for March 6th, 2024. The current auction will supply 6.8 M vintage 2024 allowances alongside 670,000 vintage 2023 allowances. As ECY has updated auction pricing for 2024, the allowances will be sold at the new minimum price of $24.02 and will trigger an allowance price containment reserve (APCR) sale in May 2024 if sold above the Tier 1 trigger price of $56.16. The previous auction in December 2023 sold all 7.1 M allowances in the current auction at a price of $51.89.
- Inslee requests lawmakers to back off GHG repeal initiative. Washington governor Jay Inslee (D) has asked lawmakers to not engage with the initiative to repeal the state’s cap-and-trade program if they do not plan to propose alternatives to the existing program. Initiative 2117, which has received enough signatures from registered voters to be brought before state legislature during the short 60-day session, would repeal provisions of the Climate Commitment Act that established the state’s cap-and-trade program and would also prohibit any state or local agency from implementing a similar trading system. Lawmakers could approve the initiative, bypassing the need to go before voters, otherwise, if lawmakers were to honor Inslee’s request, the initiative or any proposed alternatives would go to ballot in November. Supporters of 2117 and other similar repeal efforts cite higher fuel costs due to the state program as the basis for the initiative.
- House committee advances GHG linkage bill. The Washington House Environment and Energy Committee has advanced an amended version of HB 2201 which proposes adjustments to the state’s cap-and-trade program to ease linkage with the California-Quebec market. The bill follows the previous draft legislation proposed in December 2023, including amendments to shorten Washington’s compliance periods to align with California and Quebec’s 3-year compliance periods if the former jurisdictions do not synchronize with Washington’s existing 4-year compliance period, and prohibit the use of offsets from linked jurisdictions issued before July of 2019 among other changes. The House bill closely mirrors SB 6058, a Senate bill that most notably includes provisions that would secure ECY’s right to withdraw from any linkage agreement and stipulates that any linkage agreement also preserves this right moving forward.
Offsets Update
- ECY has not issued any new Emission Offset Credits (EOCs) since the first issuance in December 2023 of nearly 250,000 EOCs to two projects, both using the ozone depleting substances (ODS) protocol.
- In the first compliance period from 2023-2026, no more than 5% of an entity’s compliance obligation may be met using EOCs, however an additional 3% may be met by EOCs that are generated from offset projects on federally recognized tribal land.
- The Washington House of Representatives Energy and Environment Committee has advanced HB 2201, a bill that includes amendments restoring language that would prevent the use of carbon offsets issued before July 2019 from linked jurisdictions.
WCA Pricing Update
Pricing as of February 9th, 2023:
- Vintage 2024 – Feb. 2024 Delivery: $34.55
- Vintage 2024 – Dec. 2024 Delivery: $36.50
- Vintage 2024 Average Daily Price (Jan. 2024): $46.01
Market Update
- Dec-24 allowances saw unprecedented drops over the course of January. Pricing started at $54.00 to start the month and remained mostly flat in the first week. Prices then started to decline in the second week, starting at $53.25 before dropping to $49.50, losing nearly $1.00 per day. Allowance pricing continued to fall through the third week from $49.88 to $48.50 and plummeted even further to $37.98 in the final week of the month before bottoming out at $34.50 to close out the month.
- WCAs set a new all-time low for Dec-24 allowances at $33.12, marking a 39% YTD drop on Feb. 5th, 2024.
- All 7.1M vintage 2023 allowances offered in the quarterly auction held on Dec. 6th cleared at $51.89, just $0.01 below the Tier 1 APCR trigger price, marking the second lowest auction settlement price seen in the program the February auction which cleared at $48.50.
- ECY has updated the auction prices for 2024. Each year the adjustment factor is determined by adding 5% plus the rate of inflation as measured by the most recently available 12 months of consumer price index data for urban consumers on the first business day in December each year.
2024 Auction Price Updates
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Floor Price
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$ 24.02
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Ceiling Price
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$ 88.15
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Tier 1 Trigger Price
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$ 56.16
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Tier 2 Trigger Price
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$ 72.15
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Figure 1. WCA Daily Transactions (Feb. 2023 to Present)
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WCA Pricing (Vintage 2024)
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Dec. '24 Delivery
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Prompt Delivery
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Average Daily Price (2024):
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$ 44.01
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$ 41.88
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Average Monthly Price (January 2024):
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$ 47.02
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$ 46.01
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2024 Highest Daily Price:
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$ 54.00 (Jan. 2nd, 2024)
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$ 52.20 (Jan. 2nd, 2024)
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Questions? Contact our team for more information: environmental@aegis-hedging.com
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