The Department of Ecology today reported the results of its second regular auction of Cap-and-Invest Program allowances for 2024, which was held on June 5th (link).

On June 5th, Ecology offered for sale 5,260,000 of its own Vintage 2024 allowances and 542,333 Vintage 2024 allowances that had been consigned for sale by private parties. Separately, Ecology offered for sale 2,200,000 Vintage 2027 allowances. (An allowance can satisfy a compliance obligation only for its vintage year or a subsequent year.) For both vintage 2024 and Vintage 2027, the auction price minimum was $24.02

The settlement price for Vintage 2024 allowances was $29.92 per metric ton. All offered allowances were sold. The $29.92 price is somewhat higher than the $25.76 price for Vintage 2024 allowances at the March 6th auction, but significantly lower than the average price paid for Vintage 2023 allowances at last year’s auctions, $55.12 per metric ton.

The settlement price for the Vintage 2027 allowances was $24.02 per metric ton, the minimum. Only 1,317,000 allowances were demanded at that price.

The low prices are not surprising. Initiative 2117, which will appear on the November ballot, would repeal the Climate Commitment Act (CCA). If this measure passes, the allowances sold in the June 5 auction will have no value. The prices bidders are willing to pay for allowances are reduced by the possibility that the CCA will be repealed.

Based on the June 5 auction price, the expected compliance cost for emissions from a gallon of gasoline would be 23.6 cents, while the expected compliance cost for emissions from a gallon of diesel would be 29.3 cents. My calculations are based on carbon dioxide emissions coefficients from the Energy Information Administration (link). I assume that gasoline consumed in Washington includes 10 percent ethanol and diesel fuel includes 4 percent biodiesel.