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Weekly Carbon Outlook – July 31, 2017

July 31, 2017 by Ronjoy Bezbarua

(See below to download report)

Trading Report

  • Prices dipped mid-week and again rose on Friday reaching $15.15 for the front and $15.26 for the benchmark
  • The front changed from Jul 17 to Aug 17 on 7/27/2017
  • OCA Dec 17 benchmark prices close at CAD 19.18 (USD 15.41)
  • OI saw a positive net change of 122,000 contracts
  • Volume traded fell to 2,872,000 tons

Price Expectations

  • With the current front contract trading at USD 1.50 more than the reserve price on the secondary market, a fully subscribed auction in next month’s auction is well anticipated
  • Trading activity declined in July, with 4,498,000 current vintage changed hand compared to 8,108,000 last month
  • Expected V17 ranges: $15.10- $15.18 (Front); $15.25- $15.35 (2017 Benchmark)

CCO Tracker

  • A slim 337K offsets issued by ARB across 3 ODS and 5 Livestock projects
  • Pacific Rim Energy, Ag Methane Advisors, Camco, Diversified Pure Chem, EOS Climate and Tradewater all recipients of fresh ARBOCs
  • 30k new ROCs issued
  • Quebec Land fill gas project gains 10,800 offsets

Policy Tracker

  • AB 617- Introduced by Assemblywoman Cristina Garcia to develop a uniform state-wide system of annual reporting of emissions of criteria air pollutants and toxic air contaminants for use by certain categories of stationary sources.
  • 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 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

  • 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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