Cap-and-trade amendments will be delayed in order for the state to properly assess an upcoming leakage study, an Air Resources Board (ARB) official told ICIS.
The ARB, the cap-and-trade regulator, has been working to make changes to its programme to formulate a post-2020 plan while also developing a compliance plan for the Environmental Protection Agency’s (EPA’s) Clean Power Plan.
The ARB is looking at a host of changes to the cap-and-trade programme, including post-2020 caps, further cost-containment mechanisms and future offset rules.
Those draft amendments were initially scheduled to be released at the end of May with a final hearing coming in spring 2017. The ARB announced last month that the draft amendments would not be released until July 2016.
The first board hearing would be in September with a final adoption coming in spring 2017. Any amendments passed would go into effect in October 2017, which would be before the start of the third compliance period.
An ARB official said an upcoming leakage study was the primary reason for the amendment delays.
“We needed more time to address the many elements included in the amendment process,” an official told ICIS.
The ARB will hold its first workshop on leakage on 18 May. More details about the leakage study are anticipated later this year.
ARB officials did not say whether the amendment delay was connected to potential delays to scoping plan.
However, an Environmental Justice Advocacy Committee (EJAC) member said the amendment delay is likely tied in part to scoping plan, which is also facing timeline delays.
“There is no way they can finalise cap-and-trade regulations before [the scoping plan] is done,” the EJAC member said.
Any finalised amendments could spark some reaction in the secondary market. Entities have previously said that aggressive post-2020 caps could cause entities to hedge or bank allowances further into the future.
It is unlikely that that market would react to any current delays in the process. steven,firstname.lastname@example.org