What the First CCA Auction of 2025 Means

The results of the Climate Commitment Act (CCA) Auction #9 were released today by the Washington State Department of Ecology. At the first auction of 2025, allowances sold at $50.00 each and 7.34 million allowances were sold, of which 2.75 million were consigned for utilities to use the revenue. 

The topline takeaway: Today’s auction prices show that Washington’s carbon market is healthy and stable, with prices that remain comfortably between the floor and ceiling. There was no need for use of the allowance price containment reserve and there was robust market participation. Additionally, the fact that the auction prices exceeded the Dept. of Ecology’s forecasts will allow the Legislature to meet CCA funding priorities this legislative session. 

CCA Auction #9 generated an additional $230 million in state revenue from regulated parties plus another $137 million as consigned revenue for utilities to use for decarbonization and other community-facing uses. This brings the total funding generated by the CCA to $834 million in consigned revenue and nearly $2.9 billion to be reinvested in Washington communities to support clean air, increase safe and accessible transportation, and mitigate climate change impacts. 

Remember that you can always explore nearly 2,500 CCA-funded projects in the Clean & Prosperous Institute’s interactive resource: Mapping Washington’s Climate Commitments.  

Today’s prices were higher than the most recent forecast from the Dept. of Ecology in 2024, which was $42.11. Higher prices will help ensure the Legislature can make good on its existing Climate Commitment Act budget commitments, and the continued auction price stability is what will preserve the long-term health of the carbon market. 

Here are the top takeaways from the first CCA auction of 2025: 

• The market continues to be healthy and stable, with the $50.00 allowance price falling below 2023 average auction levels and comfortably between the price floor – $25.85 – and the current price ceiling – $94.85; 
• Revenue generated from Auction #9’s allowance prices will help the Legislature fulfill its existing CCA budget commitments; and
• Ultimately, today’s auction results continue to make a strong argument for linkage with California and Quebec, which would preserve and extend the stability of the carbon market, and therefore our ability to continue successfully capping emissions. 

What is the auction for?

While the details of the quarterly allowance auctions can seem very in the weeds, the auction is actually one of the most important tools we have to implement and monitor the CCA. The goal of the emissions cap is – of course – to reduce pollution, which at the end of the day is about improving and protecting human and environmental health and combating the effects of climate change. A stable price set by the auction market and not by the price floor or price ceiling is a strong signal that the program is working as planned.

Last year, Clean & Prosperous Washington (CaPWA) collaborated on the development and passage of Senate Bill (SB) 6058, which set in place new measures to facilitate linkage with carbon markets in California and Quebec. Notably, this bill set new rules that increased the percentage of allowances a regulated party could buy at a single auction to align with California. This is the first CCA auction with the new rule in effect.

Clean & Prosperous Washington’s lobbyist Isaac Kastama and board member Paula Sardinas were proud to join legislators, labor leaders, and former Gov. Jay Inslee at the bill signing for SB 6058 in 2024

The ins and outs of the carbon market are complex, but they are incredibly meaningful and relevant to communities and businesses across Washington. In future newsletters, we’ll continue to unpack the nuances of the program, including a clear-data-driven look at linkage with other carbon markets.

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