Washington Product Update

IncubEx is excited about the launch of Washington Carbon Allowance (WCA) Vintage Specific futures and Washington Clean Fuels Program (CFP) futures contracts on Nodal Exchange on August 11, 2023, pending regulatory review.

The Washington CFP futures contract physically delivers credits issued by the Washington Department of Ecology.

The WCA Specific Vintage futures contract is also physically delivered and enables market participants to make or take delivery of specific vintages to manage compliance obligations and WCA inventory. To date, 14,770,222 Vintage 2023 current allowances and 2,450,000 Vintage 2026 advance allowances have been sold at auction.

The new contracts expand on the pioneering Washington Carbon Allowance futures launched in December 2022 and WCA options contracts listed in January 2023 on Nodal Exchange. Since launch:

• More than 8,200 WCA futures and options (equal to 8.2 million WCAs) have traded on Nodal
• WCA open interest currently tops 3,100 lots.

Carbon and Renewable Fuels on Nodal

The first-of-their-kind contracts will extend Nodal’s compliance carbon, carbon offsets and renewable fuels products which currently include:

• Washington Carbon Allowances futures and options
• California Carbon Allowances futures and options
• California Carbon Allowances Vintage Specific futures and options
• California Carbon Offset 0, 0 DEBs & 8 futures
• California’s Low Carbon Fuel Standard futures and options
• Oregon’s Clean Fuels Program futures and options
• RGGI futures and options
• D3, D4, D5 and D6 RIN futures and options

Notables & What’s Next

• On August 9th, Washington State’s Department of Ecology is holding the first Allowance Price Containment Reserve (APCR) auction, with 527,000 allowances offered at the Tier 1 price of $51.90 and another 527,000 allowances offered at the Tier 2 price of $66.68. (This APCR Auction #1 is limited to covered entities and opt-in entities with an approved and active entity account in CITSS.)
• On August 30th, the Q3 auction is scheduled, with 8,585,000 Vintage 2023 allowances being offered. Auction #3 is open to Washington covered entities, opt-in entities, and general market participants.
• Last week featured trading in the Oregon CFP futures on Nodal.
• Open interest in California LCFS contracts stand at a high of almost 7,000 contracts.

Thank you for your continued support of Washington contracts, and all other environmental contracts offered on Nodal Exchange. If you have any questions about the new products, please contact Steve McComb, Stephen.mccomb@theincubex or Nathan Clark at Nathan.clark@theincubex.com, or anyone else on the IncubEx team for more information.

Have a great day,

Your IncubEx Team