CCA Weekly Commentary: CCAs Increase Marginally to $29.36 as Rulemaking Uncertainty Persists

This Week’s Highlights

(17^th – 21^st March 2025)

1. CCA front prices rose by 2.51% WoW to reach $29.36.
2. Traded Volumes decreased by 37.57% WoW to 35.45 M tons.
3. Open Interest increased by 2.20% WoW.
4. Compliance entities increased their short positions while decreasing their long positions WoW. Investors decreased their net long positions by 3.9 M tons of contracts WoW.

cCarbon’s Market View This Week

CCA front prices increased over the last week, closing at $29.36. Compliance entities maintained net short position while Investors maintained long positions WoW; Open Interest rose by 5.38 M tons of contracts. Trading volumes declined 37.57% WoW.

The key market driver remains the uncertainty of the release of the ISOR, which has kept the market suppressed. cCarbon assigns a very low probability to ISOR taking effect by early 2026.

Price and Volume Trends

CCA V25 front and benchmark allowance prices increased by 2.51% each to $29.36 and $30.65 respectively. Traded volumes decreased 37.57% to 35.45 M tons WoW and were 1.33% below the trailing 4-week average.

Figure 1. CCA ICE Daily Price Change, Data Source: Intercontinental Exchange

Table 1. CCA Future Price Change (Weekly), Data Source: Intercontinental Exchange

Figure 2. CCA ICE Weekly Volume Change, Data Source: Intercontinental Exchange

Trader Positions

CFTC V25: Positions Across All Traders (March 17^th, 2025)

In the latest CFTC data, reported Open Interest (OI) decreased by 2.20%, reaching 249.59 M tons over the previous week. Compliance entities were net short by 15.24 M tons, marking a 66.92% rise WoW. Managed Money decreased net long positions by 5.02% to 73.83 M tons. Swap dealers decreased net short positions by 0.77% to 73.2 M tons.

Figure 3. CFTC Positions Across Traders (WoW), Data Source: CFTC

Relative Strength Index

The Relative Strength Index (RSI) is used to assess the speed and extent of price changes. It assists in determining whether an asset is overbought or oversold, which can indicate possible price reversals or the continuation of trends. The RSI functions on a scale from 0 to 100, with values exceeding 70 signaling overbought conditions and those below 30 suggesting oversold conditions.

As of 21^st March 2025, the WCI CaT Relative Strength Index (RSI) is 36.12, in the safe zone. At the same point last year, the RSI was 42.38 was similar, in the safe zone.

Figure 4. CCA Relative Strength Index (RSI), Data Source: cCarbon

Other Market Fundamentals

• The US Bureau of Labor Statistics data shows that the consumer price index (CPI) rose by 0.2% in February (seasonally adjusted), while the increase over the last 12 months was 2.8% (not seasonally adjusted).
• US crude oil futures rose by 1.06% to $68.44 per barrel this week from $66.72 last week.

CC.Info Readers Digest

• WCA After Auction Review | cCarbon
• WCI After Auction Review | cCarbon
• New Washington State Legislation Would Fundamentally Alter Pre-Linkage WCA Price Trajectory | cCarbon
• Deep Dive on Washington Emissions: They Remain Flat Even as Cap Declines 7% | cCarbon
• California Monthly Electricity Trend Sheet – December 2024
• RGGI Monthly Emissions Trend Sheet- January 2025
• RGGI Quarterly Emissions Trend Sheet- Q4 2024
• WCI Monthly Emissions Trend Sheet – February 2025
• RGGI Monthly Electricity Trend Sheet – December 2024

Analyst Contact

• Malaika Aggarwal (maggarwal@ckinetics.com)