Cap-and-invest auctions are sealed-bid auctions — not like the classic highest-bidder-take-all auctions we see in the movies. Instead, participants can choose to submit a single bid for all their desired allowances, or a series of bids for groups of allowances at different prices.
The bids are then automatically sorted in order of bid price, starting with the highest bid, and allocated to each bidder in that order. Once all the allowances are accounted for, the lowest bid that successfully won allowances is the price that all bidders pay.
Participants who bid below that threshold will need to purchase their allowances from other businesses and individuals on the trading market, like buying stocks.
As required by regulation, we will issue a public notice of each scheduled auction at least 60 days before the auction date. These notices will be posted on the CCA Auctions and Trading webpage in the Auction Notices tab at the bottom of the page.
You can also sign up to receive auction alerts or general CCA updates to stay informed about upcoming auctions.
Businesses and individuals who want to participate in the cap-and-invest auctions — or buy and sell allowances and offset credits on the trading market — must first register with Ecology and provide information about their corporate structure and affiliations to make sure the marketplace is fair, safe, and transparent.
You can learn more about the auction and trading registration requirements on our CCA Auctions and Trading webpage.
On Sept. 29, 2022, we adopted the final language for the Chapter 173-446 WAC rule, which includes the calculations for determining auction floor and ceiling prices for cap-and-invest auctions.
The specific floor and ceiling prices for each year will be announced on the first business day of December of the year preceding the relevant auctions. The prices for 2023 auctions were announced on Dec. 1, 2022.
The Legislature determined that three types of businesses should be issued allowances at no cost: "emissions-intensive, trade exposed" industries (EITEs), natural gas utilities, and electric utilities.
The amount of no-cost allowances a business receives depends on the type of business and their total baseline emissions or carbon intensity, so the exact amount will vary.