Pennsylvania took another significant step towards joining the RGGI. Governor Wolf vetoed the Concurrent Senate Resolution 1, which aimed to stop the state from joining the Regional Greenhouse Gas Initiative (RGGI) (PA Gov.). The resolution will now be re-sent to the legislation, where it will need a ⅔ majority to override the veto. Governor Wolf also anticipates a court case against joining the RGGI, which will further delay the entry of Pennsylvania into the RGGI (Pennlive).
The RGGI futures price is expected to get a slight boost in price on Tuesday, as news of the veto will impact trading. The allowances are already trading near their all-time high of $14.5, after a breakout from the $13.9 levels. More volatility is expected in January, as the Pennsylvania legislature will have one month or ten voting days to override the veto. If the override fails, the state would have completed all the legislative requirements to join the RGGI. The state’s entry will increase the emissions under the RGGI ETS by 60%, and bring the third largest coal producing US state under a carbon ETS.
Volumes
The ICE futures market saw 4.7M tons of volume exchange, 53% higher than the prior week. Jan22, March22 and Dec22 delivery contracts were traded with 56%, 43% and 1.5% of volume respectively. Entities have returned to the market after the holiday season, and volumes will grow as the compliance surrender deadline approaches at the end of February, 2022.
CFTC Traders position Data
Across all market players, the number of new positions were negligible.
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