Washington State’s carbon offsets with direct environmental benefits to the state (DEBS) are forecasted to surpass $100 per tonne of CO₂ equivalent (tCO₂e) in the early 2030s under a base scenario, according to new analysis from cCarbon. The projection assumes that Washington’s cap-and-invest programme will link with the California-Quebec cap-and-trade market by 2027, a step the state’s Department of Ecology has said is feasible.
Landscape view of Rock Creek Park, a vast urban park in Washington, D.C., managed by the National Park Service. AI generated picture.
Harry Horner, head of strategy at cCarbon, noted that prices could reach $120–130/tCO₂e at their peak in the early 2040s. ‘That said, that’s still a really attractive price in today’s paradigm, although 10–15 years off, we expect to be in a different carbon paradigm. And if we’re not, then there are bigger issues at play’, he said.
Horner described Washington’s offset market as a ‘flashing bulb of opportunity’ in the near term. However, he pointed out the risk of potential market headwinds from 2035 onward due to oversupply risks, with the credit bank expected to peak in 2037. The forecast also indicates prices could exceed $150/tCO₂e by the mid-2040s—more than triple current levels.
The analysis noted that ‘long-term offtake deals at the depressed allowance prices of the next 24 months will fundamentally prove the best value, but examining the fundamentals and contracting Washington offsets between 2031–2033 and the peak of issuance may also prove wise.’
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In contrast, California carbon offsets (CCOs) with DEBS are not expected to hit the $100/tCO₂e mark until the latter half of the 2030s. Prices are projected to peak before declining in the 2040s, representing more than a fourfold increase from today’s levels. Current assessments place CCO-0 non-DEBS at $12.80/tCO₂e and CCO-0 DEBS at $24.75/tCO₂e.
The analysis emphasised that the evolution of California’s post-2030 offset policy will be a critical price driver. ‘California’s post-2030 offset policy framework emerges as the paramount market driver, with price impacts ranging from $90 to $145 by 2035, depending on regulatory direction’, the note said. It stressed the importance of early policy clarity and stakeholder engagement.
Washington’s cap-and-invest programme, launched in 2023, covers about 70% of state emissions and targets a 95% reduction from 1990 levels by 2050. A formal linkage with California and Québec could be finalised in 2026, potentially enabling a joint market as early as 2027.
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