Upcoming events and issues we’re watching, plus the week’s headlines — refreshed weekly. Open to all; links go to non-paywalled coverage.
Upcoming events & issues to watch
Latest news
California–Québec cap-and-invest · price outlook to 2045
It is the Alpha Inception view that California carbon prices ride policy rails for years — until supply and demand start to bind in the 2030s.
The auction floor, the reserve-price (APCR) tiers and the ceiling are the rails this market trades on. In our view, for years the price simply tracks them; only when the bank draws down far enough does supply and demand start to bind and pull prices up the rails — bounded, in the end, by what carbon can politically add to a gallon of gasoline.
OTC secondary-market Dec-26 · updated daily
$33.09
California Carbon Allowance ($/tonne)
●●● over the floor
Price forecast — probability fan
3,000 probability-weighted runs across the bank, abatement, MDI, offset, CCS, linkage and recession assumptions.
Nominal $/allowance. The band is widest in the late-2020s — the open question is when the market tightens — then narrows through the 2030s as policy limits clamp the range.
Median (P50)Base caseP25–P75P10–P90
Base case · 2030
$00
floor + carry regime
Peak (mid-2030s)
~$00
then eases by 2045
First APCR reliance
20XX
share of runs by 2034
Avg vs CARB
+$0
vs CARB’s average
🔍
Registered · free
These headline figures are free with registered access.
Our house view against CARB’s own average, ClearBlue, and the regulatory floor.
From EDF/Greenline at the floor to CARB’s own commissioned UC Davis model near the ceiling — our house view sits right around CARB’s $60 average — Washington linkage lifts it, but our bank, a 12-month floor, two-phase MDI and a mild 2027 recession hold it back.
The forecast turns on a handful of assumptions. The specifics — and the ability to change them — are for clients.
The cap cut −000 Mt
The adopted path removes allowances from 2027–30 budgets, steepening the annual decline. Cumulative 2027–45 supply falls to a level set in our assumptions register.
MDI reserve +000 Mt
The industrial decarbonization reserve adds allowances back above the cap. Our release share, timing and demand effect are model assumptions.
The bank ~000 Mt
The private bank is the shock absorber. Its starting level and the floor it defends set the timing of reserve reliance.
Affordability ceiling $0/gal
A political limit on combined CCA + LCFS pass-through to pump prices caps the forecast below the nominal reserve ceiling.
🔒 Assumption names are open; the figures and detail behind each are client-only — see access & pricing.
Our pre-auction read — expected clearing relative to the reserve price, likely subscription, and what the result signals for the front of the curve.
Sep 1, 2026 Regulatory
Amended cap-and-invest regulations scheduled to take effect
Which provisions bite first (offsets under the cap, cap-adjustment factors, MDI), and how the effective date interacts with the pending injunction request.
by Sep 1, 2026 Regulatory
Office of Administrative Law (OAL) review of the final rulemaking packageOAL ↗
OAL must clear the package before the effective date; our view on timing risk and what a slip would mean for vintage 2027 budgets.
Filed Jul 1, 2026 Legal · ongoing
CBE v. CARB — CEQA challenge to the amendments (LA County Superior Court)Coverage ↗
Communities for a Better Environment seeks an injunction to block the Sep 1 effective date and vacate the approval over the MDI's environmental review. Our read on likelihood, timeline, and the market impact of each outcome.
The public view above is our base case. Clients get the full interactive model — change any assumption and watch the balance and price re-solve, then export it.
✓Scenario editor — bank, abatement, MDI, offsets, CCS, recession, Washington-linkage year
✓Year-by-year supply / demand / bank / APCR tables
Sources. CARB 2026 rulemaking (ISOR, SRIA incl. UC Davis / Québec Ministry of Finance modeling, staff workshops, CEQA RTC); Legislative Analyst’s Office; JLCCCP hearing background; ICAP; 2024 IEMAC Annual Report; D. Cullenward allowance-value model (Apr 2025); EDF / Greenline Insights; ClearBlue Markets; CA Energy Commission IEPR; OTC secondary-market prices.
Washington Cap-and-Invest · separate market for now
Washington trades on its own — until it links to California–Québec.
Washington's Climate Commitment Act market is modeled separately today; on linkage the two pools merge into a single price. Washington allowances (WCA) currently trade well above California (~$55 vs ~$33) — a convergence dynamic our model captures across candidate linkage years (2027 / 28 / 29). The full Washington price forecast is in build-out.
Next-auction read, APCR activity and the WCA–CCA spread.
Autumn 2026 Linkage
Ecology to adopt linkage rules (proposed spring 2026) — potential linkage 2027Ecology ↗
Our linkage-timing scenarios and the combined-pool supply/demand and price impact.
🔒 Analysis on each item is client detail.
Sources. Washington Dept. of Ecology (Cap-and-Invest auction notices & results; WAC 173-441/173-446 linkage rulemaking); ICAP; OTC secondary-market prices.
California Low Carbon Fuel Standard · transportation-fuel credits
Recovered off the 2025 crash — now a tug-of-war between tightening targets and a still-growing bank.
LCFS credits crashed to ~$40 in mid-2025 on a renewable-diesel and RNG flood, then recovered to ~$76 as the amended carbon-intensity target stepped up to 22.75% (Jul 2025). The program targets a 30% CI reduction by 2030 and 90% by 2045 — bullish for deficits — but the credit surplus is still projected to grow to ~41 Mt by Q4 2027 on RD, biomethane and EV credits. The new auto-acceleration mechanism is the swing factor: it auto-tightens targets to draw the bank down and restore prices.
LCFS · Dec-26
~$76
$/credit · updates daily
2025 low
$40
Jun 2025, pre-approval
Credit surplus
~41 Mt
projected by Q4 2027
CI target · 2030
−30%
vs 2010; −90% by 2045
Price — crash, recovery & the road back
Full probability fan to 2045 · 3000-run scenario MC · year-end prices. Spot through the 2025 crash and recovery, and an illustrative path as targets tighten.
LCFS credit price, $/credit. The 30%-by-2030 step-down and the auto-acceleration mechanism support a recovery; the pace depends on how fast the ~41 Mt surplus draws down.
LCFS credit price · history + house pathcrashed $40 (2025) → ~$76 now
How high can it go — vs the CCM ceiling
Base path vs the Credit-Clearance-Market cap; the affordability ceiling holds it well below the CCM.
Alpha base pathCCM ceiling
Supply/Demand and Bank Balance Forecast
Credits vs deficits and the credit bank. Full detail for clients.
🔒 client detail
Credits (supply)Deficits (demand)Credit bank (Mt)
The carbon-intensity schedule
The benchmark every fuel is measured against — and the rule that can pull it forward.
Carbon intensity in gCO2e/MJ. The heavy lines are the regulatory benchmarks — the CI score a fuel must beat — falling to 90% below the 2010 baseline by 2045. The flat lines are the blended consumed CI of the major credit and deficit pathways, held constant so the chart isolates the benchmark’s movement against them. A pathway earns credits while the benchmark sits above its line and owes deficits once it drops below. Dairy-digester RNG is off-scale below the axis (roughly −150 to −350) and is not plotted.
The amended target jumped to 22.75% in Jul 2025 and steps toward 30% by 2030 — rising benchmarks generate more deficits and demand for credits.
The credit bank ~41 Mt
RD, RNG and EV credits kept the surplus growing — projected ~41 Mt by 2027. Until it draws down, it caps the recovery.
Auto-acceleration AAM
The 2025 amendments' AAM auto-tightens targets when the surplus stays high — the mechanism designed to draw the bank down and restore prices.
Pump-price link
LCFS is the second half of the affordability ceiling on gasoline — combined CCA + LCFS pass-through is what caps our carbon-price forecast.
🔒 Our credit-bank drawdown model, scenario toggles (RD blend, EV growth, AAM path) and year-by-year forecast are client detail — see access & pricing.
Sources. CARB LCFS (2025 Final Regulation Order & SRIA; LCFS Data Dashboard; quarterly data summaries); LCFS Weekly Digest; IETA; OTC secondary-market prices. Internal Alpha Inception LCFS credit model.
Regional Greenhouse Gas Initiative · Northeast power-sector CO₂
RGGI allowance budgets drop sharply starting in 2027, and CCR releases, load growth and emissions leakage become the swing factors.
Three demand forces pull in different directions. Data-center/AI load growth and cancelled offshore-wind projects push covered emissions up and erode carbon-free power (both bullish); emissions leakage to generators outside RGGI pulls covered emissions down — the carbon shifts out of the region rather than disappearing (bearish). Against a Model-Rule cap that plunges from 2027 (offsets eliminated), Virginia rejoins July 1, 2026 (11.48M half-year budget + 1.148M CCR at the Sep/Dec auctions) as a structurally short state — net new demand; its full 2027+ budget is pending (HB 29). But watch the supply valves: the enlarged two-tier CCR (from 2027) is a bigger release, and in 2026 RGGI is auctioning ~9 million allowances beyond regular volumes (Virginia’s re-entry, state set-asides and CCR) — if the states repeat those additions in future years, the extra supply could pull prices down. On balance the market tightens, but the CCR and any repeat allowance additions are the swing factors.
RGGI · Dec-26
$40.70
OTC secondary-market Dec-26 · updates daily
Our view · 2030
$46
CCR still capping
2035
$70
cap outpaces the CCR
2040
$75
above the models
Price forecast — probability fan
The Alpha Inception view: RGGI stays elevated and rises as the cap outpaces even the enlarged CCR. Nominal $/short ton, 2026–2040.
Anchored to the current OTC secondary-market Dec-26 mark. The two-tier CCR holds price near today's level for a few years; from ~2030 the Model-Rule cap outpaces cap+CCR and price rises, bending as high prices pull gas→clean switching forward.
Median (P50)Base caseP25–P75P10–P90
Supply/Demand and Bank Balance Forecast
Cap vs emissions, and the ending bank under three CCR-release scenarios.
Combined 11-state supply/demand including Virginia (from H2 2026). VA is structurally short, so the market tightens faster than the 10-state view. Million short tons CO₂; 2027+ VA budgets provisional pending the HB 29 rulemaking.
Emissions (demand)Cap + CCR supplyEnding bank
What drives it
Model-Rule cap →9 Mt by 2037
The 2025 Model Rule cuts the regional budget −8.5 Mt/yr through 2033 (~44 Mt by 2030, ~9 Mt by 2037) and ends offsets & the ECR. 2038–40 is our glide toward state 2040 clean-power goals.
Virginia net short
VA rejoined July 1 2026; emissions (~33 Mt, rising on data-center load) far exceed its ~23 Mt budget — net new demand. Full 2027+ budget pending the HB 29 rulemaking.
The CCR ladder the real ceiling
Sustained trading above the Tier-2 trigger pulls in additional state set-aside allowances well beyond planned CCR volumes — until price corrects back below it. The trigger escalates only ~7%/yr ($29 in 2027 → $50 by 2035), so the ladder, not the cap, sets the price.
Supply flood ~18 Mt/yr
2026 already shows it: Auction 73 offered >9 Mt beyond the regular 10-state volume, plus 2.2 Mt more in December. Sustained, this adds ~234 Mt through 2040 — volume that eventually overwhelms the shrinking cap.
Demand: three effects net bullish
Virginia/PJM demand is projected +183% by 2040. Data-center load and cancelled offshore wind push emissions up and cut carbon-free power; leakage pulls covered emissions down (generation shifts outside RGGI). Net: still tightening.
How we compare
The official models say floor; the tape says $40+. Our view sits above the models, anchored to the market.
RGGI's own IPM modeling clusters near the reserve floor ($9–18, ~$39 by 2037 only in the high-demand case) and EDF's sits at the ECR trigger — yet spot is already ~$40. Our bullish structural-short view holds RGGI elevated. Dots: RGGI-IPM high-demand (~$39, 2037) and Veyt (~$36, 2030).
Structural short (cap −8.5/yr, VA + data centers) above cap+CCR; anchored to the ~$40 tape.
RGGI-IPM / ICF (Case A)
~$39 (2037)
Range
High-demand case (EPA rules + renewables); other cases at the floor. Sept 2024.
Veyt
~$36 (2030)
Bullish
Only published long-horizon number; strong-bullish through 2035. Apr 2026.
RGGI-IPM (base) / EDF
reserve floor
Bearish
Prices at/near the floor or ECR trigger even to 2040 — the market has blown past this.
Alpha View Mechanics
The reasoning behind the curve.
Anchored to the tape. The current year prices at the live OTC secondary-market Dec-26 mark and the forward path builds off it. The models say floor, but the market has already blown past them.
The CCR is a soft ceiling — until it isn't. Both tiers release because price is above both triggers, holding the market near today's level for a few years. But the CCR is a fixed quantity; once the cap falls below cap+CCR (~2030), the buffer no longer clears the short and price rises.
No hard ceiling. Unlike California's APCR/price ceiling, RGGI has none — the CCR caps volume, not price. Above the tiers, price runs free, bounded only by abatement.
Price-induced abatement. High prices pull gas→clean switching, storage and demand response forward, bending emissions down toward the cap — which keeps a near-zero 2040 cap from sending price to infinity.
2038–2040 is our assumption. The Model Rule sets budgets only to 2037; we glide the cap toward state 2035/2040 zero-carbon-power goals.
Long today, short by 2029 — California RECs ramp as the bank empties.
Compliance RECs (PCC1) are structurally long near-term: a ~50 TWh accrued bank plus voluntary CCA over-procurement hold spot near ~$7. The market tightens through the late 2020s — the OBBBA tax-credit cliff lifts cost-of-new-entry, SB100/CCA demand pushes the effective RPS above 60%, and Diablo plus legacy supply erodes. The bank depletes ~2028–2029; spot then ramps from the floor toward cost-of-new-entry and the $50 ACP.
PCC1 spot · 2026
~$7
$/MWh, near the floor
Bank depletes
~2029
from ~50 TWh today
PCC1 · 2035
~$18
depletion-driven ramp
ACP reference
$50
penalty, not a hard cap
PCC1 price forecast
Spot near the floor while the bank lasts, then a depletion-driven ramp toward cost-of-new-entry.
PCC1 tradeable spot, the long-term PPA / compliance-period clearing level, and the $50 ACP reference. $/MWh, base (“soft”) scenario, 2026–2035.
PCC1 spotPPA / CP clearingACP $50 (not a cap)
What drives it
OBBBA cliff 2027
The 2025 law ends the wind/solar PTC/ITC for projects in service after 2027 — solar net LCOE ~2×, lifting the REC a new project needs.
The bank ~50 TWh
The accrued bank keeps the market soft; it depletes ~2028–2029, after which PCC1 is structurally short and prices ramp.
Load growth
Historical ~1% vs ~4% electrification (data centres, EVs) roughly doubles PCC1 demand by 2035 — the single biggest swing factor.
SB100 & supply
SB100 pushes the effective RPS toward 90% clean; Diablo retirement and slow build (~1.4 vs ~5 GW/yr needed) tighten supply.
🔒 Scenario toggles (load growth, build pace, Diablo year, OBBBA path) and year-by-year tables are client detail — see access & pricing.
Cheap and abundant — until AI data centers and corporate 100% targets bid it up.
National voluntary RECs — the Green-e-certified certificates corporates buy to back renewable claims — have long been cheap ($1–15/MWh depending on vintage, certification and bundling) because national renewable supply is plentiful. That is changing: “enormous” data-center and AI power demand plus 300+ Science-Based-Target companies (Google, Amazon → 100% renewable by 2030) are driving voluntary demand sharply higher. Green-e-certified volume reached ~160M MWh in 2024; the total voluntary market ~319M MWh in 2025 and keeps climbing.
Price range
$1–15
$/MWh · vintage & cert dependent
Green-e volume
~160M
MWh certified, 2024
Voluntary market
~319M
MWh, 2025
Market value by 2030
~3×
from ~$1.3B today
Demand surge
Voluntary REC demand, driven by data centers and corporate 100%-renewable targets.
National voluntary REC demand, million MWh — an illustrative path off the confirmed 2024–25 volumes as hyperscaler and corporate demand accelerates.
Voluntary REC demand (million MWh)
What drives it
Data centers / AI
“Enormous” AI-driven power demand is the new marginal buyer — hyperscalers procuring at scale are tightening the premium end of the market.
Corporate 100% 2030
300+ Science-Based-Target firms — Google, Amazon and peers targeting 100% renewable by 2030 — are structural voluntary buyers.
Green-e premium
Green-e certification, recent vintage and additionality command a premium; abundant older/unbundled RECs stay cheap — a widening quality split.
Supply abundance
National renewable build keeps baseline supply plentiful, capping the low end — this is a quality-and-vintage story more than raw scarcity.
🔒 Our voluntary-REC supply/demand model, price tiers by vintage/certification, and forecast are client detail — see access & pricing.
Sources. Center for Resource Solutions (Green-e Verification Report); Environmental Finance; voluntary-REC market research.
Canada prices carbon in two places now — at large emitters, and in fuel carbon intensity.
Canada ended its consumer fuel charge on 1 April 2025, but two compliance markets carry on. The federal Clean Fuel Regulations (CFR) — Canada's counterpart to California's LCFS — run a national carbon-intensity credit market for gasoline and diesel, and credit prices climbed from under $100 in early 2025 to above $300 by mid-2026. Industrial carbon pricing continues through the federal Output-Based Pricing System and provincial systems, led by Alberta's TIER, whose price path was reset by the November 2025 Canada–Alberta MOU and its May 2026 implementation agreement. Québec's cap-and-trade, linked with California, is covered on the California–Québec tab.
CFR credits · mid-2026
~$330–360
CAD/credit, average transfer price (ECCC data)
CFR compliance fund
$350
CAD/tonne in 2022 dollars, indexed
Alberta TIER · 2026
$95
CAD/tonne headline; $115 by 2030
Federal benchmark · 2026
$110
CAD/tonne; $170 by 2030, under review
Industrial carbon price schedules
The legislated and agreed schedules, not a forecast.
Federal OBPS benchmark (legislated path to $170 in 2030, subject to the 2026 benchmark review) and Alberta's TIER headline price under the May 2026 implementation agreement ($95 in 2026 to $115 in 2030; intermediate TIER years interpolated). CAD per tonne CO₂e, 2026–2030. Effective TIER credit prices trade below the headline price.
Federal benchmark (OBPS)Alberta TIER headline price
What drives it
CFR amendments 2026
Ottawa consulted on targeted CFR amendments (including credit multipliers and domestic-content options) after U.S. 45Z clean-fuel credits tilted competition toward U.S. producers, and proposed changes in October 2026. The final rules set the 2027+ supply of credits.
CFR price vs the fund
With credits trading near the compliance-fund price, the fund acts as a practical ceiling — but it can cover only part of a supplier's obligation, so shortfalls still have to be met with credits.
TIER reset 2030
The Canada–Alberta agreement holds TIER at $95 in 2026, rising to $115 by 2030 and $140 by 2040, targets an effective credit price of $130 by 2040, and adds a minimum credit price from 2030. How fast credits tighten decides the effective price.
Federal benchmark review
The federal government reviews the carbon-pricing benchmark in 2026. The outcome sets the floor provincial systems must meet — and how far Alberta's lower path can diverge from the federal $170.
🔒 Our CFR credit supply/demand and TIER credit-balance models are being built and calibrated to ECCC and Alberta reporting; forecasts, scenarios and year-by-year tables will be client detail — see access & pricing.
Sources. Environment and Climate Change Canada (Clean Fuel Regulations credit-transfer reporting; Output-Based Pricing System; October 2026 proposed CFR changes); Government of Alberta (TIER Regulation; Canada–Alberta MOU, November 2025, and implementation agreement, May 2026); ICAP. Price figures are reported values, not Alpha Inception forecasts.
Data inputs & considerations
What goes into the models. Alpha Inception maintains its own mirrored data library; specific sources, series and calibrations are proprietary.
Regulatory & program
Allowance budgets and cap trajectories by jurisdiction, incl. adopted amendments
Carbon-intensity benchmark schedules and step-downs
Price containment: floors, reserve tiers, ceilings and clearance mechanisms
Offset limits, usage rules and compliance-period accounting
Feedstock eligibility caps and sustainability guardrails
Auto-acceleration / step-down provisions and their trigger tests
Program linkage rulemaking and re-entry timelines
Market & price
Daily broker quotes across allowance, credit and REC markets
Exchange-settled forward curves and calendar spreads
Multi-year mined price history, cleaned and continuity-adjusted
Auction results, clearing prices and coverage ratios
Open interest and forward-market positioning
Cross-market credit prices in competing jurisdictions
Physical supply & demand
Verified covered emissions and compliance-entity obligations
Quarterly credit/deficit generation and cumulative bank balances
Fuel production, imports, exports and stocks by region
Feedstock consumption by type and resulting intensity effects
Refinery-level capacity, configuration and dispatch economics
Renewable-fuel obligation and credit-generation data
Electricity load growth, generation mix and clean-firm build-out
Economic & structural
Feedstock, fuel and power price series
Federal tax-credit and incentive regimes affecting production economics
Vehicle sales mix, fleet turnover and electrification trajectories
International adoption curves used as leading indicators
Consumer cost pass-through and affordability constraints
Macro growth, industrial activity and weather-driven demand
Trade flows and tariff regimes affecting cross-border supply
Models are rebuilt as new data lands; each release is validated against published program data and independent forecasts. Figures are indicative and not investment advice.
Access & pricing
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