Washington’s first cap-and-trade auction pulled in nearly $300 million in revenue, according to a summary report issued by the state’s Department of Ecology Tuesday.

All 6,185,222 allowances offered in the Feb. 28 auction were sold, clearing at a settlement price of $48.50. That was well above the floor price of $22.20 and “in the range” of an independent analysis commissioned last summer, the agency said in a statement after results were released.  Each allowance entitles a holder to emit one ton of greenhouse gases.

The auction summary showed that 56 companies, utilities and public institutions bid into the auction, but it did not indicate which bidders were successful. 

The Ecology Department is required to provide a final revenue report by March 28.

“This is truly historic for Washington and for the global movement toward a low-carbon future,” Gov. Jay Inslee said in the statement. “This cap-and-invest system is crucial to our approach to addressing climate change, and we are very encouraged to see this program starting off so well.”

“With the cap-and-invest program now fully underway, we can begin providing critical support for reducing emissions in our state and helping communities deal with and prepare for the effects of climate change,” said Ecology Director Laura Watson. 

Washington’s Democrat-controlled legislature in 2021 passed the law establishing the nation’s second cap-and-trade program — behind California — along party lines. Last year state agencies hammered out regulations to put that law into effect. 

The Feb. 28 auction was the first of four quarterly auctions to be held this year by the Ecology Department. 

In January, Washington officials told the state Senate Transportation Committee that the cap-and-trade auctions could raise almost $1.5 billion through fiscal 2024 and reiterated their view that a new low-carbon fuel standard will raise gas taxes by about one penny per gallon. (See Washington Estimates $1.5B in Cap-and-Trade Revenue Through 2024.) 

Later this legislative session, the state Senate and House plan to allocate revenue from the first cap-and-trade auction. The Ecology Department estimates $484 million in cap-and-trade revenue will be raised in fiscal year 2023 (July 1, 2023 to June 30, 2024) and $957 million in FY 2024.

The revenue from the auctions is expected to shrink over time as the number of emission allowances is reduced. Estimates are considered less reliable as they are projected farther into the future. The agency currently estimates $901 million in revenue for FY 2025, $730 million in FY 2026 and $592 million in FY 2027.