Emissions Experts

RGGI V25 : 27.96WA Carbon Allowance W25 : 73.50WA Offset : 66.15CA Carbon Allowance W25 : 29.57CA Carbon Offset 0 DEBS : 26.00CA Carbon Offset 0 : 16.35CA Carbon Offset 8 : 15.56CA LCFS : 51.75OR Clean Fuel Program : 154.00D3 RIN : 2.44D4 RIN : 1.08D5 RIN : 1.08D6 RIN : 1.08WREGIS REC CRS Wind V25 : 3.25CT REC Class 1 : 38.75CT REC Class 2 : 25.25CT REC Class 3 : 28.50WA Clean Fuel Standard : 31.00
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California and Quebec Cap & Trade

The California Cap and Trade Program is a market-based initiative designed to reduce greenhouse gas (GHG) emissions by setting a statewide cap on total emissions and requiring businesses to hold allowances for each ton of carbon dioxide emitted. The program started in 2013 after the passage of California Assembly Bill 32 (AB32). The starting auction floor price of $10/allowance has increased by CPI plus 5% every year and is currently $25.87 (2025 auction-floor price). The California Air Resources Board (ARB) has reduced the supply of allowances and announced plans to continue to do so aggressively to assist California in meeting its 2045 net-zero GHG targets.

Initially a California-only program, Cap-and-Trade linked with Quebec and began holding joint auctions in 2014 with Ontario officially joining the market in January 2018. Only six months later Ontario repealed its cap-and-trade regulation and exited the linkage in July 2018. Washington State launched a very similar program in 2023 designed specifically with intentions for future linkage to the California/Quebec (CA/QC) program. Unlike some programs that only regulate the power market, the CA/QC program regulates any entity emitting greater than 25,000 tons of CO2 or CO2 equivalent (CO2e) per year. This includes fuel suppliers, manufacturing, and universities.

CCA Price (August 2022- June 2025)

For 2025, the combined CA/QC cap is 317 million tons of CO2e making it the largest such program in the Americas. In 2023, California emissions subject to compliance were 272 million tons against a cap of 294 million tons whereas Quebec emissions exceeded the provincial cap of 53 million tons for a 6th consecutive year. Facilities in Quebec are able to achieve compliance by purchasing surplus allowances issued by California. Surplus allowances in the bank yield short-term security for facilities in the program. However, the cap is reduced every year, and huge cuts will ultimately be needed in future years. Should Cap and Trade link with the Washington Cap and Invest program, Washington emitters are expected to further draw down the allowance bank as Washington has a relatively small bank and could soon be in a similar position to Quebec.

As a means of cost containment and as a way to create incentives for projects that reduce atmospheric carbon, California and Quebec also allow the use of offsets for 4% of an emitter’s total obligation. The ARB has approved six methodologies under which developers may generate offsets for use in this program. Because offsets trade at a discount to allowances, Emissions Experts educates clients on how the use of offsets may lower their cost of compliance and brokers offset transactions.

Most facilities receive a free allocation of allowances provided by California and Quebec. However, most facilities’ emissions exceed their allocation. Allowances are procured in quarterly auctions occurring in February, May, August, and November, through futures trading, and in over-the-counter (OTC) trades. Emissions Experts works on behalf of clients to find pricing and terms with counterparties in OTC trades. In addition to assisting with the purchase of allowances and offsets, Emissions Experts offers a full service which includes modeling clients’ emissions, allocations, and holdings, sending weekly pricing reports, detailed monthly reports with deep analysis, regulatory updates, and notice of new rulemaking, and proactive market updates when significant market events occur.