The Washington State Department of Ecology released the official APCR Auction #7 Summary Report on May 20, 2026, detailing the results of the state’s seventh Allowance Price Containment Reserve (APCR) auction, which was held on May 13, 2026, under Washington’s Cap-and-Invest Program. The report outlines the outcomes, key metrics, and auction data from the sale conducted under the state's Climate Commitment Act (CCA) cap-and-invest program.
Participation in the auction was restricted to covered entities and opt-in entities, while utility consignments were not permitted. Thirteen qualified bidders participated in the auction, representing a range of major energy companies, refiners, utilities, and other covered entities. Participants included BP, Chevron, Marathon, Phillips 66, Shell, Puget Sound Energy, PacifiCorp, and Cascade Natural Gas, among others.
The auction demonstrated strong demand from market participants. A total of 129,262 allowances were offered, and all available allowances were sold, resulting in a 100% sell-through rate. All allowances originated from Tier 1 of the reserve, while Tier 2 allowances were neither triggered nor offered during the auction. The Tier 1 reserve price was established at USD 65.26 per allowance, while the Tier 2 price threshold stood at USD 83.84.
Demand significantly exceeded available supply. The ratio of qualified bids to available allowances reached 7.79, indicating that participants collectively sought nearly eight times more allowances than were available for purchase. This represents the strongest bid-to-cover ratio observed since late 2023 and signals significant demand pressure within the market.
Unlike allowances traded in the secondary market, APCR allowances are deposited directly into regulated entities’ compliance accounts and may only be used to satisfy compliance obligations. As a result, these allowances cannot be resold or traded in the broader market. The APCR functions as a cost-containment mechanism intended to moderate price increases by releasing a limited reserve of compliance allowances when prices reach predefined thresholds or when participants face supply constraints.
What this means for the Washington compliance market
The auction results reinforce the view that Washington’s carbon market remains fundamentally tight. Strong participation, a complete sell-through of available supply, and the presence of large compliance entities point to sustained demand across regulated sectors. The high level of oversubscription further indicates that buyers continue to actively secure allowances despite elevated price levels, suggesting that participants with significant emissions obligations under Washington’s cap-and-invest framework may be increasingly focused on strengthening compliance positions and managing future regulatory exposure.
The APCR auction results also occurred amid ongoing developments in Washington’s evolving carbon market structure, including legislative alignment efforts and the anticipated future linkage with the shared Western Climate Initiative (WCI) market involving California and Québec. These developments continue to shape the broader market environment and remain important considerations for compliance market participants.
Overall, the results point to continued procurement activity, constrained supply, and persistent market tightness which may continue to provide support for allowance prices in Washington’s carbon market.
Next steps
The Financial Services Administrator will distribute auction proceeds to the State of Washington. Ecology is expected to release additional information on June 10, 2026, through the Auction Public Proceeds Report, which will provide details on the final proceeds generated from APCR Auction #7.
ClearBlue is actively monitoring these developments. For more information regarding ClearBlue’s advisory services or market intelligence coverage, please contact us.