Cap-and-Invest linkage

Linkage will take effect once all regulatory and statutory process steps are complete. The date the linkage agreement is signed is not the linkage effective date. Ecology will provide notice to the market at least 90 days in advance of the linkage effective date. 

In Québec, establishing a market linkage requires several steps, including completion of a formal rulemaking process to accept compliance instruments from Washington, the approval of the linkage agreement by Québec National Assembly, and ratification of the linkage agreement by way of an Order in Council. 

In California, establishing a program linkage requires several steps, including positive linkage findings by the California Governor under Senate Bill 1018 (Stats. 2012, ch. 39) and completion of a formal rulemaking process with adoption of linkage amendments to the Cap-and-Invest Regulation by the California Air Resources Board (CARB). 

Section 17 of the linkage agreement states: “Each Government will notify the other Governments in writing as soon as possible after having completed all its internal requirements necessary for the Agreement to come into effect.” 

Pending the completion of these steps, we expect to begin operating a linked market in 2027.  

Read the Carbon Market Linkage update for the latest on progress by all three jurisdictions toward operating a linked market.

Entities registered in the Washington Cap-and-Invest Program can start trading compliance instruments (allowances and offset credits) with entities registered in California and Québec only after linkage becomes effective by all three jurisdictions.  

The date the linkage agreement is signed is not the linkage effective date. Each jurisdiction needs to complete their linkage process, including updating regulations before linkage between Washington, California, and Québec becomes effective. Pending updates to regulations and the completion of other statutory process steps across all three jurisdictions, we expect to begin operating a linked market in 2027.  

Read the Carbon Market Linkage update for the latest on progress by all three jurisdictions toward operating a linked market.

Once linkage becomes effective by all three jurisdictions, any allowances issued by Washington, California, or Québec could be used for compliance by a Washington business. For example, if linkage is effective before the first compliance period deadline (Nov. 1, 2027), then allowances issued by Washington, California, and/or Québec that are vintage 2026 or earlier may be used by Washington businesses to cover emissions from 2023 through 2026.

For more information on compliance deadlines, visit our Cap-and-Invest compliance webpage. Read the Carbon Market Linkage update for the latest on progress by all three jurisdictions toward operating a linked market.

The CCA explains how covered entities could use offset credits in a linked market (RCW 70A.65.170). During the first compliance period (2023-2026), at least 50% of the offset credits used for compliance must provide direct environmental benefits (DEBs) to Washington. The remaining 50% of offset credits can come from projects located in a linked jurisdiction (for example: in California or Québec if we link with them).

During later compliance periods, at least 75% of offset credits must provide DEBs to Washington, with up to 25% from projects located in California or Québec. Since the CCA says the projects must be in a linked jurisdiction, not all projects that provide DEBs to California could be used for compliance in Washington.

Entities covered by the Washington program will still have the same overall limit on using offset credits for compliance, and offsets would still be "under the cap." We’ll share more information on how offsets will work in a linked market in the coming months. 

For more information, visit the Cap-and-Invest offsets webpage.

Under the CCA, Ecology must reduce “criteria” air pollution in Washington's most affected communities. Criteria air pollutants are six common substances known to harm human health and the environment: carbon monoxide, lead, nitrogen dioxide, ozone, particle pollution, and sulfur dioxide. Ecology identified 16 Washington communities that are historically overburdened with health, social, and environmental inequities and are highly impacted by air pollution.   

Improving air quality will happen in identified communities in stages over multiple years. Steps include:

• Rulemaking process to set stricter air quality standards in the 16 communities.
• Expand air monitoring network in the 16 communities.
• Grant program for these communities.
• Track and report every two years about air pollution, greenhouse gas emissions, and health impacts in each community.
• Re-evaluate the list of communities every six years.

In a linked market, we'll continue to expand air quality monitoring and reduce pollutants in these communities.

The CCA also directs us to consider air quality when approving new, high-emission industrial facilities classified as emissions-intensive and trade-exposed (EITEs). New EITEs covered under the Cap-and-Invest Program must reduce their impact on particle pollution in the affected communities.

More about our air quality work.  

Businesses can use offset credits from qualified projects to cover a small portion of their emissions (up to 8%). These offsets are “under the cap,” meaning we reduce the number of allowances we issue by the number of offset credits used, keeping us on track to meet our statutory commitment to reduce emissions by 95% by 2050.  

The CCA gives us the authority to reduce the number of offset credits a business can use if we determine it contributes substantially to air pollution in an overburdened community. 

If we link, we would still have the same overall limit on using offset credits for compliance, offsets would still be "under the cap," and the majority of offset credits would need to come from projects that benefit Washington. 

For more information, see "How would offsets work in a linked market."

In a linked market, the revenue from the sale of allowances that Washington adds to a joint auction will still fund projects in Washington. 

While the Legislature is responsible for selecting which types of projects are funded, the CCA includes some specific requirements that ensure the benefits of this program are enjoyed by all of Washington. A minimum of 35%, with a goal of 40%, of Washington’s auction proceeds must be used for projects that provide a direct benefit to vulnerable populations within overburdened communities. In addition, 10% of auction funds must be used for projects with Tribal support.  

Separately, Ecology administers two grant programs for Tribes through the CCA.

• Tribal Climate Capacity Grants: provide support for federally recognized Tribes with lands and territories in Washington state to engage in a range of climate-related activities, including developing clean energy projects; consulting on spending decisions; engaging in clean energy siting processes; applying for state or federal grant funding; and activities supporting climate resilience and adaptation.
• Tribal Carbon Offset Assistance Program Grants: provides funding for Tribes to plan, design, and assess the feasibility of carbon offset projects on federally recognized Tribal lands in Washington. The Legislature must allocate at least $5 million biennially for the carbon offset grant program.

In a linked market, both these overburdened community and Tribal funding requirements and grant programs would continue.

Washington's law mandates regular program reviews to verify emissions reductions align with state limits. Linking will not impede our ability to adjust the Cap-and-Invest Program through rule or law changes. The law also ensures any linkage agreement includes provisions for withdrawal or delinking, preserving our autonomy and flexibility in emissions management.

In early 2023, we began engaging Tribal governments and seeking input from the Environmental Justice Council, followed by other interested parties and the broader public. We used this input to inform our analysis of the linkage criteria laid out in the CCA and the preliminary decision on whether to pursue linkage.

We provided multiple options for submitting comments, including three online listening sessions, an online survey, email, mail, and voicemail. In addition, we held a forum for Tribal governments.

On Oct. 12, 2023, we issued a report covering our initial analysis of the linkage criteria, as well as a summary of the feedback we received during our exploratory process.

After considering the analysis and input, Ecology’s director made a preliminary decision to pursue linkage on Nov. 2, 2023.

As required by the CCA, Ecology conducted an Environmental Justice Assessment focused on understanding how linking Washington’s carbon market to the California-Québec market could potentially impact overburdened communities and Tribes. As a part of this assessment, we identified overburdened communities, vulnerable populations, and Tribes that could be impacted by linkage, summarized public comments and recommendations, and analyzed potential impacts.

We also we shared a technical analysis of facility-specific caps on greenhouse gas emissions, a policy recommended by the Environmental Justice Council.

A linkage agreement is a non-binding agreement that sets expectations for information sharing, cooperation, and accounting. It doesn't create new regulations or change existing regulations. That can be done only through each jurisdiction’s rulemaking process and changes to laws (statutes) made by legislators.

We worked with California and Québec to develop a Washington-California-Québec linkage agreement that meets the requirements in the CCA and all three jurisdictions signed the agreement in June 2026.

As a part of the process, we held public hearings in April and sought comments on a draft of the agreement. We then considered the comments as we finalized the agreement.

While much of Washington’s program was designed to align with the programs in California and Québec, some policies need further alignment through changes to the law and rules. In March 2024, Governor Inslee signed our request legislation to make those changes to the law, and we began the rulemaking process in April 2024.

Washington completed this process in September 2026. The final rule language and Ecology's analysis of changes can be found on the Cap-and-Invest and linkage rulemaking webpage.

California and Québec continue to work through their own processes, which include adopting regulations that recognize the addition of Washington to the linked market. 

To operate a linked market, Washington also needs to finish making regulatory changes that make our markets compatible. These changes are expected to be completed by the end of September 2026. California and Québec will have to take additional steps, too, including adopting regulations that recognize the addition of Washington to the linked program.

Depending on when linkage process steps and regulatory changes are completed by all three jurisdictions, we expect to begin operating a linked market in 2027.

Read the Carbon Market Linkage Update for the latest on progress by all three jurisdictions toward operating a linked market. 

We provided an overview of the draft Washington-California-Québec linkage agreement, answered questions, and heard comments.

• Presentation slides
• Recording of April 22 public hearing
• Recording of April 27 public hearing
• Read comments.

We shared overview information on what a linkage agreement is and provided opportunities for feedback to inform the development of the Washington-California-Québec linkage agreement.

• Presentation slides
• Recording of the Feb. 27 meeting
• Recording of the March 5 meeting
• Read comments.

We invited comments to inform the Environmental Justice Assessment at any time during the process, regardless of whether there was an open comment period. In addition to the other meetings and comment periods, we hosted two community forums to provide overview information on the Cap-and-Invest Program and linkage and gather feedback.

July 22, 2024 listening session

• Presentation slides 
• Recording

August 13, 2025 community forum

• Presentation slides
• Recording

We shared an overview of the Cap-and-Invest Program and linkage and gathered input on the linkage criteria.

• Presentation slides
• Recording from March 16 listening session
• Recording from March 29 listening session
• Recording from April 18 listening session
• Read comments

We conducted rulemaking to facilitate the linkage of Washington’s carbon market with the California-Québec carbon market, make improvements to the implementation of the Cap-and-Invest Program, and make other necessary updates including updates required by the CCA.

Rule language, meeting recordings, engagement opportunities, and other details are available on the Cap-and-Invest Program Updates and linkage rulemaking webpage.

The Legislature established an expectation of linking with other markets when it passed the Climate Commitment Act. The law clearly directs us to pursue linkage if it's determined to be beneficial, though it doesn't provide a specific timeline for doing so.

We recently shared our analysis of the potential impacts of linkage. The Linkage Criteria Findings report makes clear that a larger, more liquid market with a greater number of participants would likely provide greater price stability and lead to a more durable program. Predictable allowance market prices are important because they give covered entities the certainty needed to make long-term investments in decarbonization.

Washington decided to link with California and Québec because it's expected to provide substantial benefits to Washington’s Cap-and-Invest Program, economy, and communities. We expect linking to help our state successfully decarbonize its economy and meet our greenhouse gas reduction mandates established by the state Legislature.

Given the significant impact linkage is projected to have on allowance prices and market stability, we prioritized exploring linkage, beginning that process alongside the implementation of the Cap-and-Invest Program.

The CCA directs us to develop a "linkage-ready" program in Washington, so many key aspects of our Cap-and-Invest Program are already aligned with the programs in California and Québec.

For example, we use the same auction platform as California and Québec, which is administered by WCI Inc.

However, some policies need further alignment through changes to the law and rules in Washington. In 2024, lawmakers passed legislation addressing needed changes to the law, and we then started the rulemaking process. California and Québec would also need to make regulatory changes to link. All three programs would need to complete regulatory changes before markets could link.