Carbon Auction Results Announced; New EPA Proposed Rule Released

California-Quebec Carbon Auction Unaffected by Ontario Withdrawal

New auction results show that the California-Quebec linked carbon market does not appear to be significantly impacted by Ontario's withdrawal. The California Air Resources Board and Quebec's Ministère du Développement durable, de l'Environnement et de la Lutte contre les changements climatiques today announced the results of the August 14, 2018, joint auction, the first auction to be held since Ontario withdrew from the Western Climate Initiative.

All 63,537,013 current (2018) vintage emission allowances were sold at a settlement price of $19.77, 68 cents above the auction reserve price of $19.09. Moreover, sales of advance 2021 vintage emission allowances sold at a settlement price of $19.57, 48 cents above the auction reserve price.

US EPA Releases Proposed Affordable Clean Energy Rule (the ACE Rule)

The US Environmental Protection Agency today released its proposed federal clean energy rule targeted at reducing greenhouse gas emissions from existing coal-fired electric utility generating units and power plants throughout the US. The ACE Rule is intended to replace the never-implemented Clean Power Plan (CPP). 

The ACE Rule includes four main actions:

1. Defines "best system of emission reduction" for existing power plans as "on-site, heat-rate efficiency improvements"; 

2. Provides states with a list of "candidate technologies "that can be used to establish standards of performance and be incorporated in to their state plans;

3. updates the New Source Review permitting program to further encourage efficiency improvements at existing power plants; and

4. Aligns regulations under the Clean Air Act (section 111(d)) to give states adequate time and flexibility to develop state plans.

The following table compares the targeted CO2e emission reductions under the CPP and the ACE Rule:

Please contact Lisa DeMarco at lisa@demarcoallan.com should you wish to discuss the foregoing.