Reserve accounts

Portions of the Cap-and-Invest allowance budget are set aside for specific uses in holding accounts, or “reserve accounts,” maintained by Ecology. Allowances may be sold, allocated, or retired from each of these accounts if specific criteria are met.

Emissions Containment Reserve

The Emissions Containment Reserve (ECR) is an account that contains 2% of the annual allowance budget for the first four years of the Cap-and-Invest Program. These allowances are allocated or sold when new covered and opt-in entities enter the program.

New emission-intensive, trade-exposed industries

Emission-intensive, trade-exposed industries (EITEs) entering the Cap-and-Invest Program for the first time may receive no-cost allocations from the ECR. EITEs can only use their ECR allowances for compliance during the compliance period when they first become a covered entity. For example, if a new EITE established in 2025 receives no-cost allocation, those allowances must be used in the first compliance period (2023-2026).

Other new entities

For other new covered and opt-in entities, Ecology may hold an auction using ECR allowances for that vintage year and unused ECR allowances from previous compliance years. These auctions are open to all covered and opt-in entities and will follow process and procedures outlined in WAC 173-446-310 through 173-446-362.

For an entity to be considered a "new" covered or opt-in entity, that entity must:

Have previously been considered not covered for all previous compliance years and 2015 through 2023, as applicable.
Have been notified that their emissions exceed a compliance threshold for covered emissions after the 2023 compliance event.
Have not been registered in the Compliance Instrument Tracking System Service (CITSS) as a covered or opt-in entity prior to the previous compliance event.

If these conditions are met, Ecology will release an auction notice 60 days prior to the auction. This notice will be released in July of the year following compliance notifications. For example, for an entity notified in 2025 of a 2024 compliance obligation, the notification will come in July 2026.

Voluntary Renewable Electricity Reserve

Each budget year, 0.33% of the allowance budget is set aside into the Voluntary Renewable Electricity (VRE) Reserve. Ecology removes and retires allowances from this account if purchasers of eligible VRE request retirement. Organizations can retire renewable energy credits registered in the Western Renewable Energy Generation System (WREGIS).

The VRE Program supports purchases of renewable electricity and renewable energy credits that are not mandated by any other requirements in Washington or any other jurisdiction, including renewable portfolio standards or clean electricity standards.

Renewable energy credits cannot be used to meet compliance obligations.

To be eligible for this benefit, organizations must meet the following criteria:

The credits represent generation that occurred during the year in which the allowance will be retired.
The credits must be retired for the purposes of VRE before the request of allowance retirement is made.
The credits may not be sold or used to meet any other mandatory requirements in Washington or any other jurisdiction.

To have credits retired toward the VRE Reserve Account, organizations must submit the VRE Program application form by July 1 of the following year. For example, to qualify for 2024 retirement, the form must be submitted by July 1, 2025.

Once this form is processed by Ecology, organizations will receive a link to Ecology’s WREGIS VRE Reserve Account. Ecology will notify organizations of a successful retirement.

At the end of the budget year (Dec. 31), the organization will be notified of the number of allowances retired on their behalf.

The VRE account has a limited number of allowances. The number of RECs to allowances is calculated using the equation below. If this number of total RECs to allowances for a given year is greater than the number of allowances in the VRE account, the allowances will be retired at a prorated rate.

VREretired = MWhVRE × EFunspecified

Where: "VREretired" is the number of allowances to be retired from the voluntary renewable electricity reserve account for the eligible generation rounded down to the nearest whole ton; "MWhVRE" is the amount of voluntary renewable electricity, in MWh, that is generated in the previous year by the eligible generation; and "EFunspecified" is the default CO2e emissions factor for unspecified power, based on the methods provided in WAC 173-444-040(4) using the data required in WAC 173-441-124 (3)(b).

Contact information

Auctions & Market Team
RegistrarCCA@ecy.wa.gov