Seattle, WA—The first Climate Commitment Act allowance auction of 2025 happened against a backdrop of volatility—the future of federal agency funding for clean energy, clean infrastructure, and climate protections is uncertain. Legislators are currently wrestling with tough budget decisions from the projected $14B shortfall.
But Climate Commitment Act implementation continues, and is more important than ever as the primary revenue source for climate and clean energy. We’ve got updates on the latest auction results, as well as a check-in on progress of linkage and air quality programs.
First auction of 2025 brings $230 million for community climate investments
The Department of Ecology hosted the first allowance (or “pollution permit”) auction for 2025 last week, March 5th, raising $230 Million for climate projects in Washington communities. This brings the total revenue raised (starting Jan. 2023) to an incredible (and needed) $2.9 Billion. Notably, an additional $137M was raised for utilities to offset any program costs for low-income ratepayers and invest in home efficiency and support the move from fossil fuels to electric.
You can find Ecology’s summary report here for more details on this most recent auction. Allowance prices settled at $50, up from $40.26 at the previous auction in December. These results demonstrate that in the third year of auctions, prices are settling back into their expected range. This means more stability both for pollution permit purchasers, and, most importantly, for revenue outcomes. This helps the Legislature make more informed decisions about allocating CCA funds.
The Legislature’s allocations for CCA dollars will be out soon
In law, the CCA requires the revenue generated through its polluters pay system to go towards programs that will help lower climate emissions, expand clean energy generation, and protect and restore our lands, air, and water. In the face of the state budget crunch, it’s vital that lawmakers honor the intention of the law, and make sure CCA dollars aren’t diverted away from programs that reduce pollution, directly bring clean energy benefits to Washington families, and help state agencies build the infrastructure we need to make it all possible.
See the end of this article for some detailed line items we’re watching in the budget.
New progress in linking Washington’s market with Québec and California
Since 2023, the Department of Ecology has been actively exploring and pursuing the potential of linking Washington’s market with the existing joint California-Québec market. The three jurisdictions agree that a linked market could stabilize prices, ensure long-term program sustainability, and ultimately lead to greater reductions in climate pollution across the region. A successful linkage can encourage other states and governments to adopt similar programs, as well as spark private-sector innovation towards zero-carbon technologies.
Washington has been engaged in numerous processes to prepare for potential merged markets, including detailed rulemaking to align on needed regulatory updates to bring the three systems together, a public comment period on a formal linkage agreement, and an environmental justice assessment to thoroughly assess the impact of linkage on communities. California and Quebec must complete their own regulatory processes.
The Department of Ecology is currently accepting public comment on its final linkage agreement draft through March 31st. After this final comment period, and once California and Québec complete their own regulatory processes, linkage could occur as soon as 2026 or 2027.
Implementation of the CCA forges on: Improving Air Quality in Frontline Communities
A focus on cleaner air is fundamental to the CCA—the DOE will soon begin rulemaking for a new rule to limit criteria pollution from high-polluting sources in 16 overburdened communities across the state. This section of the law, which builds on the expanded air monitoring network also funded through the CCA, focuses solely on improving local air pollution in frontline communities.
Specific, high-impact solutions for communities that we’re advocating for in the next biennium’s budget-
- LMI heat pump program ($130 million): To ensure equitable access to heat pumps and other electric appliances, the Legislature should increase funding of their popular heat pump rebate program (HEAR) for low- and middle-income households, adult family homes, and small businesses. To align with the State Energy Strategy, the electrification incentive program should be funded for the 2025-2026 biennium and increase over time.
- Multifamily Housing Decarbonization Program ($54 million): Low-income residents are the least able to transition off of gas, and for tenants of affordable, multi-family housing (MFH) it is largely up to building owners to transition to electric and efficient homes and appliances. We are advocating for the Legislature to re-invest in affordable MFH housing incentives for energy efficiency upgrades and electrification retrofits.
- Zero-emission medium-and heavy-duty vehicle voucher program ($200 million): Medium- and heavy-duty vehicles, including buses, big trucks, and delivery vans, make up around 10% of vehicles on Washington’s roads but are responsible for 30% of the state’s on-road greenhouse gas emissions. This funding helps get drivers into zero-emission alternatives.
- EV community and home charging programs ($165 million): The WA EV Charging Program rolled out support for installing chargers in and near multi-family residences, at fleet depots, at workplaces, and in other public sites. There’s demonstrated demand for these solutions- there were far more applicants than awards due to limited funds.
- Instant EV rebates for Washingtonians living on low incomes ($105 million): This new program was incredibly successful, running out of its $45 million of funding in less than three months. Nine in ten participants said they would not have been able to afford an EV without this program, and some participants shared they were now spending less on a new, safer vehicle than they had been spending to fill up their gas tank!
- 100% clean school buses ($20 million): Riding in old diesel school buses is bad for kids’ health and can even impact their behavior and academic performance. We should continue helping school districts and bus providers in the switch to pollution-free buses.
