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*All prices in USD
Auction Results for December 2017 Auction #4
Summary: The fourth cap-and-trade auction in Ontario was undersubscribed clearing only 20,898,000 allowances at a floor price of CAD17.83 with a bid-ratio of 0.83. The results would be seen as surprising ahead of the linkage with California and Quebec as the last three Ontario auctions were fully subscribed and the November Joint Auction clearing price was the highest yet. The demand for allowances in the current auction was likely dampened by fears surrounding the provincial election results in 2018. The Progressive Conservative Party has promised to replace cap and trade with a carbon tax if it comes to power after elections in June next year. In contrast, the advanced auction was fully sold out clearing 3,116,700 allowances with a subscription ratio of 1.45 and clearing at CAD 18.89, which is CAD 1.51 above the auction reserve price. This indicates that at least some entities hold strong faith in the continuation of the program.
Auction Results | Current 2017 Vintage | Future 2020 Vintage |
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Total Allowances Available for Sale | 25,296,367 | 3,116,700 |
Total Allowances Sold | 20,898,000 | 3,116,700 |
Total Qualified Bids Divided by Total Allowances Available | 0.83 | 1.45 |
Proportion of Allowances Purchased by Capped Participants | 91.5% | 92.9% |
Herfindahl-Hirschman Index | 1,404 | 1,873 |
For a comprehensive breakdown of Ontario’s first auction and secondary market impact analysis please see Ontario Cap-and-Trade December Auction Results 2017
The Climate Action Reserve are currently working with Ontario’s Ministry of Environment and Climate Change (MOECC) to deliver 13 adapted protocols for compliance under Ontario’s cap-and-trade program. Offset issuances and project developments will be displayed here as-and-when the they occur For more information please see Ontario Draft Offset Regulations
In 2016 the government of Ontario passed the Climate Change Mitigation and Low-carbon Economy Act, 2016. The act outlines the framework for the province’s, cap-and-trade program with the aim of establishing an effective market mechanism to curb greenhouse gas emission levels and transition the province to a low-carbon economy.
Ontario’s cap-and-trade program came into full effect in 2017. The program covers all facilities emitting over 25,000 tonnes of greenhouse emissions per year, electricity importers and fuel suppliers that sell more than 200 litres of fuel per year. In partnership with the Western Climate Initiative, Ontario’s Ministry of the Environment and Climate Change intends to link the province’s cap-and-trade program with California and Quebec, expanding North America’s largest carbon market.
This page provides all the relevant documentation and information needed for compliance entities and market participants operating within Ontario’s carbon market.
Allowance Definition: |
An allowance is a tradable permit that allows the emissions of one metric ton of Carbon Dioxide (MTCO2e). |
Emissions Cap: |
Ontario has set an initial cap of 143,332,000 tonnes of GHG emissions for 2017. This cap is set on the best estimates of emissions and declines annually to support the province’s GHG emission targets of 15% below 1990 levels by 2020, 37% below 1990 by 2030 and 80% below 1990 by 2050. |
Distribution of Allowances: |
In order to ease the transition towards a low carbon economy and minimize the risk of leakages, large emitters will be given set quotas of allowances free of charge. During the program’s first compliance period (2017-2020) most large polluting emitters will be given free allowances covering the majority of their emissions with allocations declining each year. For more information on the methodology for distributing free allowances and to apply for free allowances in 2018, please see: Methodology for the Distribution of Ontario Emission Allowances Free of Charge |