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The Washington Department of Ecology released the Emissions Containment Reserve (ECR) Auction Notice #1 today. The program’s first ECR auction will be held on September 16, 2026 and we’re sharing the following information to inform the market of our ECR allowance auction supply methodology.
What is the ECR?
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 to new or expanded emissions-intensive, trade-exposed facilities (EITEs), and sold at auction when new covered and opt-in entities enter the program. Only covered and opt-in entities are eligible to participate in the ECR auction. Allowances won at the ECR auction will be deposited into the participating entity’s general account.
When does an ECR auction occur?
When new covered and opt-in entities enter the program an ECR auction will be held prior to the next annual compliance deadline. These auctions are open to all covered and opt-in entities and will follow the processes and procedures outlined in WAC 173-446-310 through 173-446-362.
To be considered a ‘new’ entity and trigger an ECR auction, at least one entity must:
- Have not had emissions above the coverage threshold for all previous compliance years and baselining years, as applicable,
- Have been notified that their emissions exceed a compliance threshold for covered emissions after the first compliance event, and
- 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.
This first occurred when entities were covered in the Cap-and-Invest market based on 2024 emissions, for which they complied in November of 2025. We are now planning to hold our first ECR auction prior to the November 2026 compliance deadline.
How many allowances will be offered?
The number of ECR allowances Ecology will offer for ECR Auction #1 is 731,000.
The proportionate share of overall ECR allowances on offer for each ECR auction is determined as follows:
- First, the total program allowance budget for a given year is divided by the total program allowance budget through 2050 to determine the percentage of the cap available that year. That same percentage is used to determine how much of the ECR that will be introduced each year.
- The percentage is then multiplied by the total number of allowances in the ECR and rounded up to the nearest thousand.
- If an ECR auction is not triggered or sold out in a given year, the unsold ECR allowances are added to the supply at the next ECR auction.
This year’s ECR auction is triggered based on new entrants that joined the market based on covered emissions in 2024. Therefore:
- This ECR auction introduces the proportionate share of ECR allowances from 2024.
- Since an ECR auction was not held for 2023, the unsold proportionate share from 2023 will also be offered in this ECR auction.
The sum of the 2023 and 2024 proportionate share of ECR allowances is 731,000 allowances.
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