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Washington State Holds First Carbon Auction

On January 1, Washington State’s cap-and-invest program went into effect. Under the program, the Department of Ecology sets a limit, that will be reduced over time, on overall carbon emissions.  Covered entities are required to obtain allowances for their applicable emissions. An allowance is simply the ability to emit one metric ton of carbon dioxide equivalent.

Consistent with the program, Ecology held its first carbon auction for the sale of vintage 2023 allowances on February 28. In total, 6.18 million allowances were sold. The settlement price per allowance was $48.50. For comparison, in 2012 California held its first carbon auction and the market settled on a clearing price of $10.09 per ton of carbon emissions.

Washington’s next carbon auction is scheduled for May 31, 2023. A summary of the February auction results is available here. For more information, contact NPGA’s Jacob Peterson.