Businesses that are covered under the Climate Commitment Act must obtain compliance instruments equal to their covered emissions.
There are two types of compliance instruments, each equal to one metric ton of carbon dioxide:
- Emissions allowances that we issue.
- Offset credits gained from investing in projects that help reduce carbon in the atmosphere.
Participating businesses can get emissions allowances by:
- Purchasing them at quarterly auctions.
- Trading with other cap-and-invest program participants.
- Receiving them directly from us — for certain businesses, as specified in the CCA.
The number of current and future vintage allowances to be sold at each 2023 quarterly auction will be published in an Auction Notice at least 60 days prior to each auction date. We will also include information about how many no cost allowances are being sold by consignment on behalf of electric and natural gas utilities.
Starting in 2024, we will publish the dates and number of allowances to be sold at each quarterly auction for that year by Jan. 15. You'll be able to find these notices in the "Notices and reports" section at the bottom of this page.
The number of allowances offered for sale will vary from auction to auction, depending on a few key factors:
The total allowance budget for 2023 is 63,288,565 allowances, of which 6,185,222 were sold at the first auction in February. We will announce the number of allowances to be offered for sale at the next auction in our Public Auction Notice, which will be posted in the "Notices and reports" section at the bottom of this page at least 60 days prior to the auction date.
Yes. There are limits to how many allowances anyone can buy or hold in their accounts. Different limits apply to businesses that need them to cover emissions versus businesses or individuals that are buying them as an investment, like stocks.
Purchase limits help ensure that auctions are competitive and that no single entity can buy up more than their fair share, and holding limits prevent allowance hoarding.
Every dollar of state revenue generated by the quarterly auctions will support new investments focused on improving access to clean transportation, clean energy, increasing climate resiliency in our ecosystems and communities, and addressing environmental justice and health equity issues across Washington.
The law also requires that a minimum of 35% of this revenue go to projects that benefit the communities in Washington that historically bear more than their fair share of the burdens of climate change, and that 10% go to projects with tribal support.
The Legislature will decide the specific programs and projects to receive auction revenue — Ecology does not control how these funds are invested. You can learn more on our Auction proceeds webpage.
Auction and trading platform information
In December 2021, Washington joined the Western Climate Initiative, Inc. (WCI), the nonprofit that provides the auction platform for the linked programs in California and Québec, as well as the stand-alone program in Nova Scotia.
We held our first quarterly auction on Feb. 28, 2023. To participate in an auction or to trade allowances, businesses and individuals must set up an account in the Compliance Instrument Tracking System Service (CITSS).
You can find resources, trainings, and forms needed to register in CITSS and particpate in auctions on our Auctions trainings and resources page.
At the end of each four-year compliance period, participating emitters must submit "compliance instruments" — emissions allowances and offset credits, if applicable — equal to their covered emissions for all four years.
In addition, by November 1 of each year, participants must submit compliance instruments equal to 30% of their emissions for the prior year. At the end of the four-year compliance period, businesses must submit allowances to cover the remaining 70% of their total emissions for the entire period.
For example, in the first compliance period (2023-2026) the compliance schedule looks like this:
- Nov. 1, 2024: 30% of 2023 emissions
- Nov. 1, 2025: 30% of 2024 emissions
- Nov. 1, 2026: 30% of 2025 emissions
- Nov. 1, 2027: 30% of 2026 emissions, plus the remaining 70% of all 2023-2026 emissions