California Carbon Allowance Price Climbs 13 Percent in Latest Joint Auction

The California Air Resources Board on Aug. 26 released the results of its latest joint carbon allowance auction with Quebec’s Ministry of the Environment, with all available allowances selling above the reserve price, signaling continued demand from regulated companies across the linked carbon market. The Aug. 19 sale cleared current allowances at $32.48 per metric ton, while allowances available for future compliance years settled at $32.75, extending the market’s pattern of competitive quarterly auctions.

The auction offered nearly 49 million current allowances and about 6.5 million future allowances, with every available allowance selling. California supplied most of the available allowances through state-issued and consigned credits, while Quebec also contributed allowances through its auction program. The results reinforce the auction’s role in providing companies with a transparent price for managing emissions obligations.

Qualified bids exceeded available supply for both current and future allowances, indicating companies continued securing allowances for immediate compliance needs while planning for future obligations. Nearly 78 percent of purchased allowances went to regulated companies, showing compliance demand remained the primary driver of market activity.

The results mark another increase from the previous joint auction in May, when current allowances cleared at $28.81 and future allowances settled at $28.76, with all available allowances also selling. The higher August settlement prices suggest companies continue valuing long-term access to carbon allowances as compliance obligations tighten.

The latest auction also follows a broader expansion of the linked market. California, Quebec, and Washington signed an agreement in June to begin the process of linking the three carbon markets, with a shared market expected to begin operating in 2027 once each jurisdiction completes the required regulatory steps.