WA’s third carbon auction should push pollution credits over $1B
This April 2, 2010 file photo shows a Tesoro Corp. refinery, including a gas-flare flame that is part of normal plant operations, in Anacortes, Wash. The Washington Department of Ecology is releasing its report on the first-ever state carbon auction. (Ted S. Warren/AP Photo)
Washington will hold its third carbon auction on Wednesday under its new cap-and-invest program.
The first two auctions sold pollution credits totaling about $800 million. The third is expected to put the total for the year well over $1 billion.
This is the first year of implementing the state’s new Climate Commitment Act, which passed in 2021. Businesses generating more than 25,000 metric tons of carbon emissions must participate in the program or face fines of up to $10,000 per violation per day.
During the 2023 legislative session, lawmakers made decisions about how to spend the money raised through these auctions, focusing on projects to slow or adapt to climate change. Those investments include money to electrify buses and ferries and build a charging infrastructure, restore salmon habitat, accelerate clean-energy projects and help ease the burden of pollution on vulnerable communities.
The May auction sold pollution for more than $500 million. The February auction raised almost $300 million.
The Washington Department of Ecology announced this week that the May auction sold nearly 8.6 million 2023 allowances and another 2.5 million 2026 allowances. Each unit represents one metric ton of greenhouse gas emissions.
The price on carbon was higher at the May auction, where bids were received almost entirely from energy companies and utilities.