Weekly Carbon Outlook – July 24, 2017

July 24, 2017 by Ronjoy Bezbarua

(See below to download report)

Trading Report

  • Prices rose on Tuesday and dipped on Friday reaching $15.15 for the front and $15.30 for the benchmark
  • OCA Dec 17 benchmark prices close at CAD 19.19 (USD 15.29)
  • OI saw a positive net change of 1,343,000 contracts
  • Volume traded fell to 3,645,000 tons

Price Expectations

  • The current front reached its new peak of USD 15.30 in light of the supermajority vote to extend the program
  • A restriction on out-of state offset usage in the next decade will increase the compliance cost significantly.
  • Expected V17 ranges: $15.10- $15.18 (Front); $15.25- $15.35 (2017 Benchmark)

CCO Tracker

  • Pagel’s Ponderosa Dairy Methane Reduction Project (CAR1049) issued 22k registry credits
  • A-Gas Americas list two new ODS projects
  • CCO prices make sizeable gains to meet new CCA prices
  • Domestic offset requirements raise new questions about offset premiums

Policy Tracker

  • AB 398- Introduced by Assembly Members Eduardo Garcia, Senator De León. It aims to extend Cap-and-Trade program beyond 2020 till 31st Dec 2030 by requiring the state board to include specified price ceilings, price containment points, offset credit compliance limits, and industry assistance factors.
  • SB 100- Introduced by Senate President Pro Tem Kevin de León, it requires California to generate all its electricity from renewable.
  • SB 498-Introduced by Senator Skinner. It is an act to add Section 43018.8 to the Health and Safety Code, and to add Section 25724 to the Public Resources Code, relating to vehicular air pollution

Key Dates

  • July 27- Public Hearing by Air Resources Board to Consider Proposed Amendments to the Market-Based Compliance Mechanism Regulation (Cap-and-Trade Regulation)
  • Aug 15– California Air Resources Board and Quebec’s MDDELCC will conduct its 12th Joint Auction for Carbon allowances and will offer year 2017 vintage allowances in the Current Auction and year 2020 future vintage allowances in the Advance Auction.

Download this report (pdf)

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