California-Quebec Carbon Auction Prices Show Slight Increase

The 41st quarterly carbon auction held by California and Quebec sold all of the nearly 52.6 million carbon permits offered under the current auction at a price of $31.91 per allowance, above the floor price of $24.04, according to the results released on Nov. 27 by the California Air Resources Board. The current auction clearing price is slightly higher compared to the previous auction, which settled at $30.24.

Current allowance prices set a record high of $41.76 in February and continued to decline in the next two auctions. The latest auction marks a small recovery, indicating that prices are stabilizing, but the overall decline following the February peak may indicate some uncertainty or shifting expectations about the cap-and-trade system’s future design, as stakeholders wait for new rules. The board is considering regulations governing the program. This auction marks the final auction before the close of the current compliance period.

The advance auction sold all the allowances offered, totaling about 7.2 million, at $30.16 each, up from the previous auction’s settlement price of $29.75. Compliance entities purchased 82.03 percent and 72.36 percent of current and advance allowances, respectively.

The auction proceeds are placed in the Greenhouse Gas Reduction Fund and distributed through the California Climate Investments initiative to statewide projects that deliver environmental, economic, and public health benefits across the state.