330,000 California carbon allowances trade

California carbon allowances (CCAs) to be delivered in 2013 traded at $14.50 this week, remaining steady following the CCA auction held earlier this month.


Volumes for California carbon allowances to be delivered in 2013 also remained healthy with 330,000 allowances exchanging hands.


California carbon allowance trading has been linked to energy futures, as electric providers are now factoring in the associated cost of buying compliance instruments to account for the emissions produced from electric generation.


The high price for California carbon allowances no doubt has regulated businesses looking to take advantage of carbon credits since they are typically sold at a discount to allowances.


Last December a deal for 100,000 carbon credits selling at $11 apiece was reported and this year Shell Energy purchased 500,000 carbon credits generated from a forestry project.


Other regulated companies facing new emission regulations including Pacific Gas & Electric and the Sacramento Municipal Utilities Department have issued Requests for Offers for hundreds of thousands of carbon credits.


However studies have forecasted that the available supply of California carbon credits will fall well short of the potential 10 million annual demand.