The nine northeastern states participating in the Regional Greenhouse Gas Initiative (RGGI) have set the 2014 RGGI cap at 91 million tons — a 45 percent reduction from last year’s CO2 cap.
Additionally, the RGGI cap will decline 2.5 percent each year from 2015 to 2020. By 2020, power plant CO2 pollution in the nine RGGI states is projected to be half of 2005 levels.
The first carbon auction under the new cap, and the 23rd RGGI auction overall, will take place on March 5. At the auction, the states will offer for sale 18.6 million CO2 allowances with a reserve price of $2.
The 22nd RGGI auction, held Dec. 4, sold out of carbon allowances, selling some 38.3 million CO2 allowances at a clearing price of $3 and raising $114.9 million
Additionally, the RGGI states have announced the first of the interim adjustments to the RGGI cap. This adjustment will help account for the private bank of allowances held by market participants before the new cap was implemented, the states say.
The RGGI states include two interim adjustments to the RGGI cap to account for banked allowances. The first control period interim adjustment for banked allowances is a reduction to the RGGI cap equivalent to the private bank of first control period allowances (2009-2011). The adjustment is applied to each state’s annual CO2 allowance budget for 2014-2020.
The first control period adjustment is 57.4 million allowances and the adjustment to the RGGI cap for 2014 is 8.2 million. The 2014 RGGI adjusted cap for the nine-state region is 82.8 million.
The RGGI states are scheduled to announce the second control period interim adjustment on March 17. The second adjustment is applied to each state’s annual CO2 allowance budget for 2015-2020.