Trading volume in RGGI dropped 30% over the second quarter versus a quarter earlier, with 44.4 million units changing hands in spot and futures, as appetite for deals eased following a March compliance deadline, a quarterly review by the market’s official monitor Potomac Economics said on Tuesday.

Some 63.7 million units changed hands over Q1, when trading surged ahead of RGGI’s Mar. 2 compliance deadline when power plants across the nine north-eastern US states had to surrender enough allowances to match their emissions over the 2012-2014 period.

The drop came entirely from bilateral spot transfers between unaffiliated firms, which fell to 15.1 million from 34.4 million, while futures trade on ICE was constant at 29.3 million each quarter.

But the report showed that volume had picked up year-on-year in Q2, with total turnover up 13% from 39.4 million in Q2 2014, with a 10.9 milllion uptick in futures traders only partially offset by a 6.1 million drop in spot dealing.

RGGI prices were $5.53 on average over Q2, 2% higher than Q1 while trading in a $5.30-5.80 range over the three months.

Some 69% or 116 million of the 169 million carbon units in circulation at the end of the quarter were held by utilities regulated under the programme.

This is well below the 85% holding the utilities held at the end of 2014.

By Ben Garside – ben@carbon-pulse.com