Washington State Carbon and Clean Fuels Program

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 & CFP

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.

Washington Carbon Allowance (WCA) Vintage Specific futures and Washington Clean Fuels Program (CFP) futures contracts were added in August 2023.

The contracts complement the California Carbon Allowance (CCA), Regional Greenhouse Gas Initiative (RGGI), California’s Low Carbon Fuel Standard and Oregon’s Clean Fuels Program contracts on Nodal. You can find more contracts information here.

Vintages V23-26N/A
DescriptionPhysically delivered into the Washington Compliance Instrument Tracking System Services registryPhysically delivered futures contract on Clean Fuels Program (“CFP”) Credits issued by the Washington Department of Ecology.
Contract Size1,000 Washington Carbon Allowances100 CFP Credits
CurrencyPriced in US dollarsPriced in US dollars
Minimum Tick Size$0.01 per Washington Carbon Allowance$0.25 per CFP Credit
Contract SeriesQuarterly contracts starting with the December 2023 expiry through 2025Monthly contract sets for the current and coming calendar year, plus December contracts for up to 10 consecutive years. The exchange may list any other calendar month contract set off the standard listing cycle.
Last Trading Day3 Business Days, prior to the last business day of the delivery month3 Business Days, prior to the last business day of the delivery month
Delivery DayPhysical Delivery on the last trading day of the contract monthPhysical 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.

Graphic/Chart sources: Washington Department of Ecology

Program Information Overview

RegistryWashington 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.
VintagesNodal will offer V23 – V26 as part of the initial contract listing.
BankabilityAllowances can be banked indefinitely.
Covered EntitiesNatural Gas Utilities, Electric Utilities, Waste-to-Energy (2027), and Railroads (2031), equivalent to ~75% of the State’s emissions
Auction FrequencyQuarterly
Compliance PeriodsCompliance 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

Source: CARB

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.


  • Covered entities 
  • Opt-in entities
  • General market participants
Allowances distributed at auction
  • Current year vintage allowances offered at each quarterly auction
  • Future vintage allowances available at least twice annually
BankabilityAllowances can be banked indefinitely.
Participation guidelines
  • Apply for participation to the State at least (30) days prior to the auction
  • Each entity must have a different representative with an approved auction account
  • Single auction buying limits:
    • Covered and opt-in entities - 10% of allowances offered during a single auction
    • General market participants - 4% of allowances offered during a single auction
Bid guaranteeThe 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



North American Carbon Markets
on Nodal Exchange


NA Carbon Contracts
on Nodal Exchange

This page is for illustrative purposes only. For official contract and trading information, please visit Nodal Exchange