November 17, 2014 – In the secondary markets for California carbon allowances, prices for 2014 delivery moved higher according to broker data as of Nov. 12: The December 2014 vintage 2014 California carbon allowance futures contract was talked in a bid-and-ask range of $12.15/tonne to $12.25/tonne, up about 2 cents from the week before.

The over-the-counter spot market for California carbon allowances was marked in a bid-and-ask range of $12.10/tonne to $12.14/tonne, increasing about 2 cents on the week as well.

Some sources have attributed the recent strength in California carbon allowance prices to the fact that participants met a Nov. 3 deadline for partial compliance under the California cap-and-trade system, having to surrender 30% of their 2013 emissions for permanent retirement.

Additionally, participants are awaiting the state's final quarterly carbon allowance auction for the year to be held Nov. 19. The sale will also mark the first joint carbon allowance auction for California and Quebec, with more than 23 million vintage 2014 allowances and more than 10.7 million vintage 2017 allowances to be placed on the auction block.

At California's last auction in August, 100% of the more than 22.4 million vintage 2014 allowances offered for sale cleared at $11.50/tonne. Also, 6.47 million, or about 70%, of the more than 9.2 million vintage 2017 allowances on the auction block sold at a clearing price of $11.34/tonne. At Quebec's August allowance auction, 694,000 vintage 2014 allowances sold at C$11.39/tonne, or the floor price for that market. At that sale, 66.2% of the more than 1.049 million vintage 2014 carbon allowances for sale were purchased. In addition, more than 1.46 million, or 95.3% of the more than 1.52 million emissions credits for 2017 were sold at C$11.39/tonne. The California and Quebec cap-and-trade programs were formally linked at the start of 2014.

Keep reading the full report and analysis here.