ARB announced today that the first 600,000 compliance offsets are to be issued under the state’s cap and trade program. The issuance of compliance offsets has been long awaited, and market participants anticipate credits will be available in the next two weeks.
ARB stated both Early Action Credits and Compliance Protocol offsets will be issued in the first batch of credits. Early Action Credits are carbon reductions derived from activities under the four (4) approved Climate Action Reserve protocols California adopted. Last year, the Board adopted Early Action and Compliance protocols for the following offset types:
- Forestry Management Projects
- Urban Forestry Projects
- Dairy Digester Projects
- Ozone Depleting Substances (ODS) Destruction Projects
California’s announcement indicated the first issued compliance offsets will be coming from ODS projects. Issuance of credits will be directly into the credit holders CITSS account – the same tracking and transfer system used for allowances.
The market for offsets has been thinly traded since ARB began the process of approving the first submitted offsets. Project developers and buyers alike have been waiting on the sidelines for the first compliance credits to be issued. The issuance of credits is expected to breathe some life into the market. Current offset pricing ranges from $8.50-$11.00, depending on terms such as invalidation risk.
If you have any questions on the current market conditions, please contact our US Carbon team at: +1 415.963.9137 or +1 914.323.0265.