Front-year vintage WCI allowances cleared at $12.29 (C$15.01) in last week’s California-Quebec market auction, a few notches above the floor of $12.10 and the previous auction’s clearing price of $12.21 in February.

The May auction sold all the nearly 77 million allowances on offer with a bid-to-cover ratio of 1.16, both governments said in a statement on Thursday. Compliance entities bought 93.6% of the available units, virtually unchanged compared to February’s sale.

Just 9.8 million of the 10.4 million 2018 vintage allowances on offer were bought at the $12.10 floor price, a reduction in demand compared to the fully subscribed February auction.

Still, speculators appeared to have a relatively bigger hand in last week’s auction, as the proportion of 2018 vintage compliance buying dropped to 91.6% from 95.1%.

Last week’s auction represented the third joint effort between California and Quebec. It was the second auction to include allowances for California’s massive transportation sector, which entered the system in January.

The sale netted around C$215 million in gross income for the Quebec government, taking its total auction revenue to date from its seven auctions to C$548 million.

California, which has a share of over 85% of the joint market, will publish its total auction proceeds on June 17.

By Robert Mullin – news@carbon-pulse.com