CCAs Await Q4 Auction Results, COP30 Wraps Up
2 Min. Read Time
California’s latest quarterly auction, held last week, is expected to clear at or near the current front-month futures price. Results will be published this Wednesday.
The sale offered more than 51 million California Carbon Allowances for the current phase, as well as nearly 7 million permits for the next phase.
November CCA futures settled at $30.13 last Wednesday (the day of the auction), unchanged from a week earlier, while the benchmark December futures contract ended at $30.24, down 4 cents from the previous Wednesday.
The sale is the first one to be held since California formally extended its cap-and-invest system through to 2045, and California Air Resources Board (CARB) officials are scrambling to start the rulemaking process for the next phase before the end of this year.
Some analysts have pointed to CARB’s proposal to cut supply for the period up to 2030 by 118 million tonnes, rather than an earlier proposed 180 million tonnes reduction, as potentially bearish for the market, but others counter that the proposed rule to bring offset quotas under the overall cap is generally bullish.
COP30 Wraps Up
Meanwhile, the COP30 climate summit in Belem, Brazil came to a close last week, where countries wrangled over the wording of various high-level statements, including a “roadmap” to transition away from fossil fuels.
Delegates from many countries also spoke out against Europe’s Carbon Border Adjustment Mechanism (CBAM), which they see as a unilateral trade measure that threatens the economic development of emerging economies. For its part, the EU has framed CBAM as a measure aimed at preventing emissions from “leaking” from the EU to other countries, and has rejected the criticisms.
Technical negotiations over the Paris Agreement’s carbon markets focused on a standard requiring nature-based carbon credit projects to be monitored for any reversals long after their crediting periods have ended. Market participants complain that this requirement makes such projects virtually uninvestable, since any profits would be eaten up by monitoring costs, and are pressing for the language to be watered down.
Meanwhile, many countries signed up to initiatives aimed at harmonizing and standardizing market rules, to make it easier for emerging national carbon markets to link up. The Brazilian presidency of this year’s COP has floated an Open Alliance for Compliance Carbon Markets, which will set out its goals in the coming months, while a Singapore-led Alliance to Grow Carbon Markets is also working to build capacity in developing countries.
Carbon Market Roundup
The weighted global price of carbon was $55.70, down 0.3% week over week. EUAs were down 0.6% over the week at €80.41. UKAs were up 1.4%, to close at £57.77. CCAs were up 0.5% at $30.25. RGGI was up 4.6% at $26.88. WCAs were up 3.0% at $69.25.
