California carbon trading at $18.25

The California carbon market continues its upward rise as trading prices and volumes continued to soar.

California carbon allowances (CCAs) closed at $18.25 a piece, up nearly 10% from the previous week’s price.

Significant volumes were moved as well with over 200,000 CCAs trading over the Intercontinental Exchange.

For the past several weeks carbon prices have been bolstered by renewed confidence in a January 2013 market launch.

Furthermore, the shutdown of a California nuclear power plant that supplies a significant portion of the state’s electricity with very limited emissions has caused other regulated electric utilities to reposition themselves for market compliance either by acquiring additional CCAs or purchasing carbon offset credits.

Compliance entities will be able to use carbon offset credits to meet up to 8% of their emission requirement, creating a demand for over 10 million in the first year of the market alone.

Only four project protocols have been approved to generate carbon offset credits that will be eligible in the California carbon market.

Market analysts predict a large gap between the supply of available carbon offset credits and what will likely be strong demand from industries seeking these cost-saving commodities.