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Clean Air Markets

Progress Report

Market Activity

Market Activity Figures

Last updated: 05/2017

Related Figures

2015 Allowance Transfers under CSAPR and ARP
Allowance Spot Price (Prompt Vintage), January – December 2015

Key Points

Transaction Types and Volumes

  • In 2015, over 900,000 allowances were traded across all four of CSAPR trading programs. More than half of the transactions within the CSAPR Group 1 sulfur dioxide (SO₂) program and nitrogen oxide (NOₓ) annual program were between unrelated parties (distinct organizations). A little more than one-third of CSAPR Group 2 SO₂ program and NOₓ ozone season program allowance transactions were between distinct organizations.
  • In 2015, over 5 million ARP allowances were traded, the majority (81 percent) between related organizations.

2015 Allowance Prices

  • ARP SO₂ allowance prices averaged less than $1 per ton.
  • CSAPR SO₂ Group 1 allowance prices started 2015 at $250 per ton and ended 2015 at $3 per ton.
  • CSAPR SO₂ Group 2 allowance prices started 2015 at $450 per ton and ended 2015 at $5 per ton.
  • CSAPR NOₓ annual program allowances started 2015 at $250 per ton and ended 2015 at $99 per ton.
  • CSAPR NOₓ ozone season program allowances started 2015 at $250 per ton and ended 2015 at $175 per ton.

Analysis and Background Information

Transaction Types and Volumes

Allowance transfer activity includes two types of transfers: EPA transfers to accounts and private transactions. EPA transfers to accounts include the initial allocation of allowances by states or EPA, as well as transfers into accounts related to set-asides. This category does not include transfers due to allowance retirements. Private transactions include all transfers initiated by authorized account representatives for any compliance or general account purposes.

To better understand the trends in market performance and transfer history, EPA classifies private transfers of allowance transactions into two categories:

  • Transfers between separate and unrelated parties (distinct organizations), which may include companies with contractual relationships (such as power purchase agreements), but excludes parent-subsidiary types of relationships.
  • Transfers within a company or between related entities (e.g., holding company transfers between a facility compliance account and any account held by a company with an ownership interest in the facility).

Allowance Markets

The 2015 emissions were below emission budgets for the Acid Rain Program (ARP) and for all four Cross-State Air Pollution Rule (CSAPR) programs. As a result, CSAPR allowance prices were well below the marginal cost for reductions projected at the time of the final rule, and are subject, in part, to downward pressure from the available banks of allowances.

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