skip to main content
Back to all blog posts

Posted in: Ontario | Climate Change / Renewables | Energy Policy

Jun 15, 2017

All Current Allowances Sold at Ontario’s Second Carbon Credit Auction

By David Stevens

On June 14, 2017, the results from Ontario’s second Cap and Trade Program Auction of Greenhouse Gas Allowances were released. All available current allowances were sold at the June 6, 2017 auction, along with more than half of the future allowances available for sale.

The recent auction was the second time that participants in Ontario’s Cap and Trade Program were able to purchase allowances. As we reported earlier, the first auction resulted in the sale of all available 2017 credits, along with almost 1 million 2020 vintage credits. The prices paid were marginally above the Auction Reserve Price. The total proceeds from the first auction were around $472 million.

The results from the June 6, 2017 auction were even stronger than the first auction. In the second auction, all of the 25 million allowances related to the current year (2017) were sold, along with around 1.7 million 2020 vintage allowances (of the 3 million made available for purchase). The “Auction Reserve Price” (the minimum price at which allowances would be sold) was $18.30 (slightly higher than at the first auction) and the “Settlement Price” for current allowances was $18.72 (more than 3% higher than at the first auction).

As we have discussed (see here, here and here), the Ontario government plans to fund its Climate Change Action Plan with the proceeds from the sale of allowances. The proceeds from the second auction total more than $500 million, meaning that almost $1 billion has been raised from the first two auctions. The Ministry of the Environment and Climate Change news release announcing the results of the second auction emphasizes that all auction proceed (earlier forecast at around $1.8 billion per year) will be invested in programs under the Climate Change Action Plan to reduce emissions.

Ontario will hold four Cap and Trade Program Auctions of Greenhouse Gas Allowances during 2017. The next auction date has not been published, but it is expected to happen around September.

Related Blogs

Posted in: Ontario | Energy Policy | Climate Change / Renewables

Insights EnergyInsider
Ontario Publishes Draft Rules for Cap and Trade “Offset Credits” By David Stevens Oct 17, 2017 Ontario’s Ministry of the Environment and Climate Change (MOECC) has published two proposals related to several new or amended regulations to facilitate linkage of Ontario’s Cap and Trade program with California and Quebec (discussed in an earlier post). The September 22nd proposal d...

Posted in: Ratemaking | Ontario | Facilities

Insights EnergyInsider
OEB Approves Hydro One's Transmission Revenue Requirement, With Some Changes By David Stevens Oct 02, 2017 On September 28, 2017, the Ontario Energy Board (OEB) released its Decision on Hydro One’s transmission revenue requirement for 2017 and 2018. For the most part, the OEB accepted Hydro One’s forecasts and requests, although there are a number of areas where there are differences.

Posted in: Climate Change / Renewables | Consumer Protection | Ratemaking | Ontario

Insights EnergyInsider
Proposed Legislation Would Require Cap and Trade Costs to Be Identified on Ontario Gas Bills By David Stevens Sep 28, 2017 The Transparency in Gas Pricing Act, 2017 passed second reading on September 21, 2017, and has been referred to the Ontario Legislature’s Standing Committee on Finance and Economic Affairs. This proposed legislation, which is sponsored by an opposition party MP, would require that every gas...