Is a repeat of 2021 on the cards for California's carbon market?

A major compliance deadline in the California carbon market is approaching in November 2024. The race to secure sufficient emission allowances could spark the next big upward move in the state’s carbon price.

Normal procedure requires obligated entities to surrender Californian Carbon Allowances (CCA’s) equal to 30% of the previous year’s verified emissions by the start of November. However, CCA’s equal to all remaining emissions must be surrendered by November in the year following the last year of a compliance period.

California’s carbon market is now in its fourth compliance period (2021-23), which means that obligated entities must deliver sufficient CCA’s to cover the entire compliance period (minus those already delivered) by 1st November 2024. The last time this happened was of course in November 2021, at the end of the third compliance period (2018-2020).