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Regional Greenhouse Gas Initiative
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Proposed Amendments to Mandatory Greenhouse Gas Reporting Rule
April 20th, 2010
March 22nd, 2010 – Environmental Protection Agency Administrator Dr. Lisa Jackson proposed amendments to the general provisions (subpart A) for the mandatory reporting of greenhouse gases. Under this proposal are three new provisions that facilities reporting greenhouse gas emissions under part 98 of the Mandatory Greenhouse Gas Reporting rule would be required to report:
- Their corporate parent companies,
- The North American Industry Classification System codes that apply to their facility,
- And whether or not emissions reported include emissions from a cogeneration unit.
These three reporting requirements would be included in time for the first annual greenhouse gas emissions reports scheduled to be submitted to the Environmental Protection Agency on March 31st, 2011, and in all years afterwards. The underlying reporting requirement already in place is intended to collect accurate emissions data in order to make informed policy decisions. The current provisions require annual reporting of industrial greenhouse gas emissions from large sources, fossil-fuel suppliers, automobile engine and vehicle manufacturers, and any facilities that emit 25,000 metric tons or more of greenhouse gases in the United States.
The comment period for the rule amendments is currently open.
For more information visit the EPA’s web-site at:
http://www.epa.gov/climatechange/emissions/proposedrule.html
Comments can also be viewed on www.regulations.gov by inserting the following docket numbers:
EPA-HQ-OAR-2009-0925, EPA-HQ-OAR-2009-0923, EPA-HQ-OAR-2009-0926, or EPA-HQ-OAR-2009-0927.
RGGI CO2 Allowances Secondary Market Report
September 4th, 2009
Potomic Economics published a report on the RGGI market satus as of September 2009. Click on the following link for the report:
http://www.rggi.org/docs/Secondary_Market_Report_September_2009.pdf
Regional Greenhouse Gas Initiative (RGGI) Certificates Trade Up 33%
October 28th, 2008
Regional Greenhouse Gas Initiative RGGI allowancess trade up 33% from the $3.07 auction clearing price. Prices on the Chicago Climate Exchange traded $4.60 for Dec 09 futures contracts on October 28, 2008. These prices are flat from pre-auction pricing.
RGGI futures contracts debuted in August and have been in a $5.50 to $3.50 in price range. Initial prices started in the mid $5 range but steadily slipped as the September auction date approached. It was a “no brainer” to sell futures prior to the auction and buy physical certificates at the auction. Traders playing it right made 25% to 40% return in less than a month.
Prices dipped down to the mid $3 range in the days after the auction but have since trended slightly higher. The next auction by the RGGI States is on December 17, 2008. Previous resistance was in the mid $5 range which is where the market seems to be heading. We will see if the buyers get hurt again by bidding up the futures price. The next auction is for 31,505,898 allowances which is nearly three times the amount of first auction.
Entities can buy or sell RGGI allowances on the Flett Exchange Electronic Trading Platform. Delivery is through the RGGI COATS platform. A Flett Exchange represenative can be reached at 201-209-0234 to open an account.
Flett Exchange operates an electronic marketplace for the Regional Greenhouse Gas Initiative RGGI allowances. Flett Exchange also has voice brokers which can administer OTC trades on RGGI futures and cash trades. The Regional Greenhouse Gas Initiative RGGI is a cooperative effort of ten northeastern states to reduce CO2 emissions. Participating states have pledged to reduce greenhouse gas emissions by power generators 10% below 1990 levels by 2010.
Flett Exchange Launches Regional Greenhouse Gas Initiative (RGGI) Allowance Market
October 7th, 2008
On October 7th, 2008, Flett Exchange launched its Regional Greenhouse Gas Initiative (RGGI) carbon dioxide allowance market. The market is available to customers on the Flett Exchange Electronic Trading Platform.
The market is for the immediate physical delivery of RGGI allowances through the RGGI CO2 Allowance Trading System (RGGI-COATS). Orders size is fully customizable by the customer to allow for exact procurement of allowances by electricity producers.
The Regional Greenhouse Gas Initiative (RGGI) is the first mandatory, market based effort in the United States to reduce greenhouse gas emissions. Ten Northeastern and Mid-Atlantic states will cap and then reduce CO2 emissions from the power sector 10% by 2018.
Flett Exchange hosts markets for physically settled commodities on its electronic trading platform. Flett Exchange uses a hybrid model of technology and brokers to assist clients in the valuing and trading various commodity products.
First Regional Greenhouse Gas Initiative RGGI Auction clears at $3.07
September 29th, 2008
The clearing price for the first RGGI auction was $3.07. This was for 12,565,387 allowances. Six of the ten states participated in this auction. Connecticut, Maine, Maryland, Massachusetts, Rhode Island, and Vermont will use the $38,575,738 in proceeds for energy efficiency, renewable energy, and other clean energy technologies.
The next auction is set for December 17, 2008. After that there will be quarterly auctions from Jan 2009 to Dec 2011.
The Regional Greenhouse Gas Initiative (RGGI) is a cooperative effort between ten (10) Northeast and Mid-Atlantic states CT, DE, MA, MD, ME, NH, NJ, NY, RI and VT. It is the United States' first carbon cap and trade program which is designed to restrict the amount of carbon dioxide electric producers emit into the atmosphere. The Cap-and-Trade Program intends to cap the total amount of greenhouse gas emissions (GHG) in order to meet specific environmental targets starting in 2009. RGGI creates allowances representing one (1) short ton of CO2. These allowances can be purchased by individuals, investors, environmental groups, brokers, financial or investment institutions and owners of electric generation sources through quarterly auctions held by the states participating in the RGGI program. Allowances can also be bought and sold between parties at any time. The auctions allocate allowances based on a sealed auction process to bidders. The total number of CO2 allowances allocated will add up to the total emissions cap for RGGI participants.
Electric Generating Units greater then or equal to 25MW will be required to purchase a specific amount allowances within the predetermined control period starting January 1st 2009. Units which were online prior to January 1st 2005 and produce greater then or equal to 50% of their heat from fossil fuels will be subject to RGGI. While Units which have come online after January 1st 2005 and produce more then 5% of their heat from fossil fuels will also be required to comply with RGGI. All other electric generation unit will not be required to comply with the RGGI Program.
Electric Generation Units which are subject to the above qualifications will be required to purchase a specific number of allowances beginning January 1st 2009. For a more specific description of the RGGI rules go to www.RGGI.org
Allowances are auctioned off on a quarterly basis. There will be two (2) pre compliance auctions taking place September 25 and December 17 of 2008. These auctions will be followed by auctions taking place beginning first (1) quarter 2009.
MARKET SPECIFICATIONS
Contract Size: 1 allowance (Each RGGI Allowance is equal to one (1) short ton of CO2).Delivery: physically to the RGGI CO2 Allowance Tracking System.
In order to trade unregulated forward RGGI contracts ("RGGI UFCs") traders must create an account with the Regional Greenhouse Gas Initiatives CO2 Allowance Tracking System ("RGGI-COATS") which is the delivery point for the contracts. Verification of account ownership will be required in order to open an account and trade on Flett Exchange. Follow the link provided to open an account in the RGGI-COATS system. www.RGGI-COATS.com
Commissions for Electronic Trades:
< 1,000 allowances = $30 per trade.
> 1,000 allowances = 3.5 cents per side.
Financial/Margin Requirements: traders must fit one of the following categories to place an order. All counterparties can choose accordingly before consummating a deal.
Class 3 Escrow: No security deposit required. Buyers must transfer funds within three (3) business days after deal to Flett Exchange. Sellers place RGGI allowances in Flett Exchange Escrow account on trade day.
Class 2 Escrow: Buyers and sellers deposit 10% of gross trade amount with Flett Exchange prior to trade. Buyers will deposit remaining 90% within three (3) business days to Flett Exchange. Sellers transfer RGGI allowances to Flett Exchange on trade day.
Class 1 Escrow: Buyers deposit 100% of deal value prior to deal. Sellers deposit 10% of deal value prior to deal. Sellers transfer allowances to Flett Exchange on trade day.
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