Seattle, WA—As the other Washington continues to deliberate the future of the Inflation Reduction Act, Washington state’s Climate Commitment Act continues to bring needed stability for state-level climate programs. The second allowance auction of the year occurred last Wednesday, June 4, and generated over $321 million, bringing the total CCA-generated revenue to $3.2 billion that is being reinvested to reduce pollution, increase transportation accessibility and safety, and support the clean energy transition while growing jobs. 

Amidst unprecedented federal efforts to threaten cap-and-invest policies and roll back climate commitments, along with uncertainty regarding the direction of neighboring markets, Washington state’s carbon market remains stable, strong, and a reflection of our communities’ and businesses’ commitment to mitigating the effects of climate change. 

Auction outcomes: 8.75 million allowances sold (of which 2.15 million consigned for utilities), raising over $321 million for community climate investments  

The allowance price settled at $58.51; coupled with the allowance price of future vintage allowances (i.e., allowances intended for use in future years pulled into this year’s auction), this brings the average allowance price to $51.22. With the downward price pressure from Initiative 2117 comfortably in the rearview, demand for allowances has recovered and prices have steadily returned to an expected price squarely between the price floor and ceiling. This return to predictable pricing means more stability for purchasers to make planning decisions, and more stability for the legislature making important decisions on climate spending–increasingly important with federal volatility. 

This brings the total revenue for this year to more than half a billion dollars – $550 million – and total revenue since the program’s inception to an incredible $3.2 Billion. An additional $50M was raised for utilities to offset any program costs for low-income ratepayers and invest in home efficiency and electrification. 

You can find Ecology’s summary report here for more details on this most recent auction. As a reminder, the state holds quarterly auctions in which polluters purchase pollution permits (or “allowances) to cover every single metric ton of carbon they emit. These allowances will decrease over time to align with the cap, but the purchase of these allowances enables the state to “invest” in climate and clean energy solutions in Washington’s communities – hence its “cap-and-invest” moniker. 

Where’s the money going?

CCA revenue goes toward programs to help lower climate emissions, expand clean energy generation, and protect and restore Washington lands, air, and water. The scale of projects ranges from hyperlocal grants for e-bikes and heat pumps to hundreds of millions in funding to install charging infrastructure and replace or convert seven diesel ferries into hybrid-electric vessels, which are some of the most effective CCA projects at reducing harmful emissions. Funded projects can be found in detail on the Clean & Prosperous Institute’s Mapping Washington’s Climate Commitments tool, most recently updated in February 2025, or the Department of Ecology’s project map. 

Air quality monitoring moving forward with local partners and community input

The Department of Ecology is focused on decreasing toxic criteria pollution in local communities –  pollutants like PM2.5, which is one of the major byproducts of diesel pollution and wildfires. Ecology has allocated $10 million in grants specifically to improve air quality in the 16 most overburdened communities across the state, as well as increase access to cleaner transportation options for residents. The list of funded projects includes a program distributing bus passes, bikes, and portable air cleaners in South King County, electric bikes for Shoreline, replacing diesel park equipment with electric alternatives in Spokane, electric garden tools for local tool libraries, and more!  

Ecology is also in the early stages of rulemaking to implement the CCA’s provision that requires the Department, in partnership with local clean air agencies, to establish stricter air quality targets for criteria pollutants in overburdened communities. Ecology is currently engaging in stakeholder meetings and internal rule development and is expected to release proposed rules for public comment this winter. 

Addressing tougher issues like industrial decarbonization 

The CCA’s original design recognized that certain industries like manufacturing facilities and refineries will face greater challenges in decarbonization. Legislators were concerned these challenges could lead to those businesses leaving the state, resulting in both a loss of Washington jobs and a potential increase in climate pollution somewhere else, undermining the ultimate goal of the CCA. 

To address these concerns, these industries – referred to as emissions-intensive, trade exposed industries (EITEs) — are given a majority of their allowances at no cost until 2034 (though the percentage of free allowances will decrease slightly throughout that period). Ecology is deep in the process of stakeholder outreach, research, and developing recommendations for the Legislature to address this difficult issue and ensure these industries meet requirements to reduce their emissions under the “cap” in the cap-and-invest program. Ecology is taking public comment on this topic until September 3. 

That’s a wrap on the latest from the Climate Commitment Act.