California carbon permit prices higher than expected

The US state of California held its second auction of greenhouse gas allowances last week and sold all of nearly 13 million carbon permits on offer for this year. The […]

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By Vicky Ellis

The US state of California held its second auction of greenhouse gas allowances last week and sold all of nearly 13 million carbon permits on offer for this year. The allowances sold for slightly more than market expectations, it was reported.

The cap-and-trade programme is a central part of California’s global warming law and covers businesses which count for large quantities of emissions such as refineries, power plants, industrial facilities and transport fuels.

The state’s Air Resources Board (ARB) which runs the auction reported a 2013 price of $13.62 per carbon allowance, which is for 1 metric tonne of carbon emitted, in a statement released at the end of the week.

There were 12,924,822 permits auctioned for this year, while half of the allowances for 2016 were sold at a price of $10.71.

Firms who bought up allowances included the energy firms BP, Chevron, EDF and ExxonMobil as well as manufacturers like Mitsubishi Cement and the Dow Chemical company.