Washington State Carbon Market
Learn about the new Washington State Cap-and-Invest program and carbon allowances
Washington Cap and Invest Carbon Market
IncubEx and Nodal partnered to list the first Washington Carbon Allowance futures and options contracts, based on the Washington Cap and Invest program, the United States’ newest carbon market.
The program, launched on January 1, 2023, covers nearly 70 million tons of CO2e emissions annually (approximately 75% of the state’s total emissions) and mirrors the structure of California’s Cap and Trade Program.
Washington Carbon Allowance Trading Activity
The Washington Carbon Allowance (“WCA”) futures was successfully launched on December 5, 2022 on Nodal Exchange with a WCA options contract listed in January 2023.
The contracts complement the California Carbon Allowance (CCA) and Regional Greenhouse Gas Initiative (RGGI) contracts offered on Nodal.
WCA FUTURES CONTRACT SPECIFICATIONS |
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Vintages: V23-26 |
Physically delivered into the Washington Compliance Instrument Tracking System Services registry |
Contract Size: 1,000 Washington Carbon Allowances |
Priced in US dollars |
Minimum Tick Size: $0.01 per Washington Carbon Allowance |
Contract Series: Quarterly contracts starting with the December 2023 expiry through 2025 |
Last Trading Day: 3 Business Days, prior to the last business day of the delivery month |
Physical Delivery on the last trading day of the contract month |
Legislation Background and Intent

Washington’s Carbon Cap and Invest Program was enacted through the 2021 Climate Commitment Act and addresses the state’s goal of reducing state emissions to net-zero by 2050.
Program Information Overview
PROGRAM INFORMATION | |
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Registry | Washington CITSS |
Generation of Allowances | • No-cost allocation certain to covered entities based on historical emissions data. • Purchase through quarterly auctions. New allowances auctioned twice per year. • Offsets generated through registered projects in the State of Washington. |
Vintages | Nodal will offer V23 – V26 as part of the initial contract listing. |
Bankability | Allowances can be banked indefinitely. |
Covered Entities | Natural Gas Utilities, Electric Utilities, Waste-to-Energy (2027), and Railroads (2031), equivalent to ~75% of the State’s emissions |
Auction Frequency | Quarterly |
Compliance Periods | Compliance periods are (4) year cycles starting in 2023. Periods remain on (4) year cycles for compliance retirement purposes, with program goals adjusting every 8 years after. |
Compliance Instruments Overview
No-cost allowances allocated to certain Covered Entities
Allowances sold to all buyers
Offset credits generated through projects registered in and for the benefit of the state of Washington
Compliance Instruments Offsets
Washington has proposed adopting the offset standards used by California Air Resource Board’s (CARB) Compliance Offset Program. The map shows offset projects registered with CARB. (Information on these projects may be viewed here).
Protocols that satisfy the program requirements include:
- Livestock projects
- Mine Methane Capture (MMC)
- Ozone depleting substances (ODS)
- Rice cultivation
- U.S. and Urban Forest Projects
In the first compliance period, up to 5% of total allowances retired for compliance may be satisfied by registered Offset credits.
Compliance Instruments Obligations
- Covered and opt-in entities shall conduct an annual transfer of a percentage of compliance instruments but full satisfaction of the obligation must be complete by the end of the four-year compliance period.
- Compliance occurs through the transfer of allowances from the entity’s holding account to the state’s compliance account.
Auctions
AUCTION INFORMATION | |
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Frequency | Quarterly |
Participants |
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Allowances distributed at auction |
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Bankability | Allowances can be banked indefinitely. |
Participation guidelines |
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Bid guarantee | The Department may require a bid guarantee in an amount greater than or equal to the sum of the maximum value of the bids to be submitted by the registered entity |
ADDITIONAL RESOURCES
North American Carbon Markets
on Nodal Exchange
Webpage
NA Carbon Contracts
on Nodal Exchange
This page is for illustrative purposes only. For official contract and trading information, please visit Nodal Exchange