On Monday of this week, California's Air Resources Board (ARB) released summary results of the nation's first greenhouse gas (GHG) emission allowances auction. Part of the cap-and-trade program, a key component of California's AB32 Climate Change regulations, the auction was held last week.
Under the program, affected businesses and other entities were first allotted free allowances by the state. If emissions from their facilities will be more than what those allowances permit, then additional allowances may be purchased from the state under the auction program.
According to ARB Chairman Mary D. Nichols, “The auction was a success and an important milestone for California as a leader in the global clean tech market. By putting a price on carbon, we can break our unhealthy dependence on fossil fuels and move at full speed toward a clean energy future. That means new jobs, cleaner water and air -- and a working model for other states, and the nation, to use as we gear up to fight climate change and make our economy more competitive and resilient.”
The allowances were broken into two "vintages" - one for calendar year 2013 and the other for 2015. The only 2013 allowances for sale were consigned to electric distribution utilities. A total of 23,126,110 metric tons of 2013 allowances were available and all of them were sold. The settlement price was $10.09 per metric ton.
Of the 39,450,000 metric tons of allowances available for 2015, only 5,576,000 metric tons were sold. The settlement price was $10.00 per metric ton. The 2015 allowances were open to all affected entities.
ARB has not released the names of the companies that purchased the allowances, nor have they released the individual purchases. However, several Bakersfield and Kern County firms were shown as qualified bidders, including AERA Energy, Berry Petroleum, Chevron USA, Kern Oil and Refining, and several others.
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