Chapter 173-446 WAC – Allowance Price Containment Reserve
On February 21, 2024, Ecology adopted a rule: Chapter 173‑446 WAC, Climate Commitment Act Program Rule. The purpose of this rule is to clarify two aspects of the Allowance Price Containment Reserve (APCR) auctions under the cap-and-invest program.
The rule clarifies that:
- Existing holding limits specified in WAC 173-446-150(2)(a), that apply to allowances with a “vintage,” also apply to the “vintage less” allowances that are acquired through APCR auctions. "Vintage year" means the annual allowance allocation budget year to which an individual Washington greenhouse gas (GHG) allowance is assigned. Holding limits ensure that one entity can hold only a certain number of allowances in its account at a time.
- Any allowances purchased in an APCR auction must be deposited directly into the entity’s compliance account. This change to WAC 173-446-370 prevents APCR allowances from being sold or traded on the secondary market, thereby ensuring that the allowances will be used to meet compliance obligations and not for trading purposes.
Ecology adopted three consecutive emergency rules while we were working on the permanent rule.
The APCR is a tool designed to assist in containing compliance costs for covered and opt-in entities (RCW 70A.65.150(2)). If, during a quarterly auction, the settlement price reaches a certain threshold (the APCR Tier I price, which is $51.90 for 2023), we hold a separate APCR auction. Only covered and opt-in entities can participate in an APCR auction. Adding the APCR allowances into the market helps make sure that covered and opt-in entities can obtain enough allowances at a reasonable price to meet their compliance obligations. Unlike other allowances, the allowances sold in an APCR auction do not have a “vintage,” so they can be used for compliance in any year or any compliance period.
Rulemaking timeline
Announcement phase (CR-101)
Filing date:
June 8, 2023
Announcement documents
Rule development phase
June 8, 2023 – Sept. 6, 2023Public input & involvement
Rule proposal phase (CR-102)
Sept. 7, 2023
- Proposal notice – CR-102 form
- Proposed rule language
- Preliminary Regulatory Analyses
- SEPA Determination of Nonsignificance and Environmental Checklist
Comment period
Comments were due by Nov. 1, 2023. We accepted comments in the following ways:
-
Attend a public hearing online (webinar): Oct. 24, 2023, 10 a.m.
- Mail to: Nikki Harris
Department of Ecology
Climate Pollution Reduction Program
P.O. Box 47600
Olympia, WA 98504-7600
Public hearing
Date/Time: Oct. 24, 2023, 10 a.m. online (webinar)
Location: online (webinar) – recording
Register for the webinar to get your meeting ID and passcode.
To hear the webinar better or to call in only, use your phone (instead of the computer) to call 253‑215‑8782.
Agenda: Presentation, question-and-answer session, followed by public hearing
Accessibility: To request ADA accommodation for the public hearing, email Ecology’s ADA coordinator by Oct. 17, 2023. Or call 360-407-6831, 711 (relay service), or 877-833-6341 (TTY).
Rule adoption phase (CR-103)
Feb. 21, 2024
March 23, 2024
Emergency rulemaking
Third emergency rule
Adoption and effective date:
Jan. 4, 2024
Rule expiration date:
May 3, 2024
Rule adoption documents:
Second emergency rule
Adoption and effective date:
Sept. 7, 2023
Rule expiration date:
Jan. 5, 2024
Rule adoption documents:
First emergency rule
Adoption and effective date:
June 8, 2023
Rule expiration date:
Sept. 7, 2023
Rule adoption documents:
Emergency rulemaking is a modified rulemaking process that allows us to immediately amend a rule if there is a statutory basis for doing so. In this case, we have identified that making the above changes to the APCR auction mechanism meets the statutory basis of being “necessary… for the general welfare” because the changes are needed in order to protect against manipulation of the allowance market, which could result in price distortions that would harm the public interest in the efficient operation of Washington’s carbon markets. An APCR auction can be triggered after any regular quarterly auction and these rule amendments are needed in advance of an APCR auction taking place.
Once filed, this emergency rule change goes into effect immediately. It stays in effect for up to 120 days and may be renewed. We have also announced a permanent rulemaking process with these changes.
Related links
Contact information
Nikki Harris
Rulemaking Lead
nikki.harris@ecy.wa.gov
360-764-6018
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Accessibility
To request ADA accommodation for disabilities, or printed materials in a format for the visually impaired, contact Ecology's ADA Coordinator by email at ecyadacoordinator@ecy.wa.gov, or call 360-407-6831. People with impaired hearing may call Washington Relay Service at 711. People with speech disability may call TTY at 877-833-6341.