NOx Credits at All-time High
NOx credit prices are approaching, in many cases, the cost of NOx controls.
Said Verne Wochnick, senior vice president of the Automated Credit Exchange, "Now what we are seeing are some companies deciding whether to implement more advanced emissions controls, and possibly becoming suppliers of credits in the years ahead. In essence, they would be using the credit value to help pay for their control costs. That's an important change."
ACE data show that short-term Reclaim emissions trading credits for NOx topped U.S.$6.25/lb—a record price in the electronic market operated by ACE. The price reflects results from actual trades completed May 26 in the ACE market.
ACE data also show that the market prices for long-term NOx credits had increased to more than $4.85/lb, sold through the year 2011. A total of more than 1.9-million pounds of NOx emissions credits were sold in the May market.
In April, ACE tracked what were record short-term Reclaim trading credit NOx prices of $4.23/lb.
ACE noted that Reclaim emissions credit price and demand have been increasing dramatically since January 1999.
According to ACE, the market is no longer just compliance-based. Companies are looking at what increased credit market value can mean to their operations.
Commented Wochnick, "We think eventually these high prices will stabilize near the cost of control. However, the days of cheap credits are over. Companies must now plan their compliance strategies around these costs—and should be seriously considering how new control measures can create credits and therefore help pay the costs of control.
"Either way, though—short-term credit prices may well increase, because it takes time to phase in new control strategies."
Current market data are available on the ACE Website at www.acemarket.com. The next ACE market will operate the week of June 19. All ACE market-clearing prices reflect actual trades made, not offers to sell.
ACE's electronic marketplace—originating from core research developed for NASA via the Jet Propulsion Lab—has become the primary tool for Southern California businesses to cost-effectively meet their emissions reduction requirements through the Reclaim program.
Reclaim, established by the South Coast Air Quality Management District (SCAQMD), sets yearly emissions reduction goals for industry but allows companies flexibility to meet those goals by obtaining or providing "surplus" emission credits.
Contact: Automated Credit Exchange, Bill Van Amburg, Pasadena, CA. Tel: 626-356-9700.
Edited by Paul Hersch