Washington’s Climate Commitment Act auction sets price for allowances
The first Climate Commitment Act auction in Washington sold all allowances to businesses with high emissions. Each of the 6,185,222 allowances sold for $48.50, which is just short of $300 million, according to the Washington Department of Ecology.
Based on 2021 emissions, six Whatcom facilities qualified for the auction: BP Cherry Point oil refinery, Phillips 66 oil refinery, the Northwest Pipeline in Sumas, and Puget Sound Energy facilities in Sumas, Ferndale and the Encogen generating station in Bellingham.
How many allowances each of these companies purchased, if any, will not be released by Ecology.
“Regulations prohibit market participants from disclosing their business strategy,” Claire Boyte-White, Ecology cap-and-invest policy manager told The Bellingham Herald in an interview. “Whether they participate or not participate in an auction. That is because that information can be utilized by other market participants to extrapolate their business strategy or how many allowances they need and that can shift market prices for the auction and also the secondary market. Since they are prohibited from disclosing that data, we hold ourselves to the same standard.”
At least 35% and up to 40% of the money made in the auction will be used to fund overburdened communities in their responses to air pollution or climate change.
Under the same law, 10% will go to support tribal nations in Washington.
The price of the allowances depends on the auction itself. The lowest winning bid sets the price for the rest of the allowances, which was $48.50 per allowance.
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