California air regulators and oil/natural gas industry representatives are lauding the state's recent cap-and-trade auction, which sold out air emissions credits at historically high prices.
All of the more than 73.5 million emissions credits were sold for average settlement prices exceeding $14/metric ton, a record high since trading began in 2012.
The auction followed a vote by the California legislature last month to extend cap-and-trade through 2030.
Western States Petroleum Association President Catherine Reheis-Boyd said the results of the Aug. 17 auction "prove that reforming and extending the cap-trade program was the right thing to do; the passage of AB 398 has reinforced carbon market certainty, helping the industry compete in the world's most stringent regulatory environment."
The auction sold current vintage allowances (63.8 million) that fetched average prices of $14.75/metric ton, and future 2020 vintage allowances (9.7 million) that drew average prices of $14.55. The California Air Resources Board (CARB) and the Canadian province of Quebec conducted the joint auction, and proceeds from the sale will not be reported until after an ongoing exchange process is completed to divided the proceeds into U.S. and Canadian dollars, a CARB spokespersons said.
Ninety-eight qualified bidders participated, including 22 on the Quebec portion of the sale. All of the major utilities, refiners and producers in California participated. The maximum current vintage price was $50.70/metric (C$64.41) and for 2020 vintage $18 (C$22.87). Minimum prices for the U.S. and Canada were in the $13 and C$17 ranges, respectively.
In July, California lawmakers in a bipartisan vote extended the much-debated multi-billion-dollar cap-and-trade program for another decade. The CHG carbon emissions trading system was set to expire in 2020 under its creation in a 2006 climate change law. State leaders supported the legislation's passage, but some environmental organizations said it still was not enough, and they alleged that the industry had too big a role in crafting the bill's final language.