RGGI Carbon Auction Clears at Record High Prices, Generates $294 Million

The 55th quarterly carbon auction of the Regional Greenhouse Gas Initiative, or RGGI, the nation’s first market-based emissions regulation program, sold all of the nearly 21.8 million CO2 allowances offered at a record high clearing price of $13.50, according to the results released on March 11. Bids ranged from $2.44 to $30.00 per allowance with submitted bid volumes 2.5 times greater than available allowances.

Although a new record, the clearing price was not high enough to release allowances from the program’s cost containment reserve, which has just over 11.6 million short tons. This year’s trigger price is $13.91 per ton. The previous auction, which had a lower trigger price, sold more than 3.9 million allowances from last year’s reserve.

The auction raised nearly $294 million in funding for states to reinvest in energy efficiency, clean energy, and greenhouse gas mitigation programs. Over the program’s history, auctions have raised nearly $5 billion. At the end of the auction, CO2 allowances were awarded to 59 of the 75 bidders. Five bidders purchased more than 1 million allowances each, while 24 purchased at least 200,000 allowances.

Compliance-oriented entities purchased 72 percent of the allowances offered, up from 67 percent at the December auction. The program estimates that 44 percent of all allowances in circulation are held for compliance purposes, down from 50 percent at the December auction.