ICIS Launches Updated 2030 Forecast for California Carbon Allowances

30 July 2015

Now that California and Quebec have smoothly transitioned into the second phase of their cap-and-trade programs, participants have begun to take a long-term view of the market.

The ICIS 2030 Forecast for California Carbon Allowances Report- Summer 2015 Update investigates how a range of supply and demand scenarios alter the price of California Carbon Allowances (CCAs) through 2030.

In this report, we explore a number of potential reduction pathways for California/Quebec post-2020, discuss how economic and regulatory changes could impact the price of carbon, and examine key drivers that will shape emission reductions for each sector. Crucial to our updated forecast, we have made amendments to our behavioral assumptions (companies purchasing strategies) based on newly available data and extensive research recently conducted by ICIS analysts.

Key Findings in this Report:

  • ICIS believes CCA prices will stay close to the price floor throughout the next two years, but will lift off the floor way before the fundamentals suggest
  • We believe the cap post-2020 will be designed based on Governor Brown's goal of 40% below 1990 emissions levels by 2030
  • A program that is best aligned with this target has become our base case scenario
    • Such a stringent target and equally ambitious program design (combined with relatively high emissions) could yield a CCA price up to $70 ICIS expects the price of CCAs to range from $40 to $70 in 2030 (based on different supply and demand scenarios)
  • A detailed research on historic trading behavior of utilities triggered significant changes in our behavioral assumptions. Those are key to assess when the market turns short
  • Subsequently, changes in price should alter end user behavior
  • ICIS expects a shortage of offsets through 2020 and beyond

As part of the ICIS Carbon Market Analytics subscription you are entitled to the updated report, underlying data/assumptions, and the tool on our portal which allows you to combine scenarios to derive a price line.

About ICIS

ICIS is the world's largest petrochemical market information provider and has fast-growing energy and fertilizer divisions. Our aim is to give companies in global commodities markets a competitive advantage by delivering trusted pricing data, high-value news, analysis and independent consulting, enabling our customers to make better-informed trading and planning decisions. We have more than 30 years' experience in providing pricing information, news, analysis and consulting to buyers, sellers and analysts.

With a global staff of more than 800, ICIS has employees based in Houston, Washington, New York, London, Montpellier, Dusseldorf, Karlsruhe, Milan, Mumbai, Singapore, Guangzhou, Beijing, Shanghai, Yantai, Tokyo and Perth. Some 350 of ICIS’s staff are journalists engaged in reporting market prices and news, and ICIS is fully committed to upholding the highest journalistic principles of verification, corroboration and authentication. ICIS has a compliance framework that along with its methodologies and business processes adheres to the requirements of the IOSCO PRA Principles.

ICIS is a division of Reed Business Information, part of RELX Group.

About Reed Business Information

Reed Business Information provides information and online data services to business professionals worldwide. Customers have access to our high-value industry data, analytics, information and tools. Our strong global brands hold market-leading positions across a wide range of industry sectors including banking, petrochemicals and aviation where we help customers make key strategic decisions every day. RBI is part of RELX Group plc, a world-leading provider of information solutions for professional customers across industries.

About RELX Group

RELX Group plc is a world-leading provider of information solutions for professional customers across industries. The group employs about 28,000 people of whom half are in North America.

Reed Elsevier PLC is the London Stock Exchange listed vehicle for holding shares in RELX Group. Shareholders in Reed Elsevier PLC own a 52.9% economic interest in RELX Group. Reed Elsevier NV is the Amsterdam Stock Exchange listed vehicle for holding shares in RELX Group. External shareholders in Reed Elsevier NV own a 47.1% economic interest in RELX Group. The combined market capitalisation of the two parent companies is approximately £24bn/€32bn. Its shares are traded on the London, Amsterdam and New York Stock Exchanges using the following ticker symbols: London: REL; Amsterdam: REN; New York: RUK and ENL. 



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