A mounting allowance surplus spurred by declining fuel sales in the WCI cap-and-trade programme should result in smaller price gains than previously expected following Wednesday’s auction and into the next decade, according to analysts.
Toronto-based consultants ClearBlue Markets said gasoline sales had fallen in California and Quebec through July – down 3.9% YoY in Quebec and 1.2% in California – after rising through the past several years.
“While the US and California economies continue to perform strongly, this could be the sign that fuel sales may have peaked,” ClearBlue wrote. “Factors such as the Low Carbon Fuel Standard and increased market share of electric vehicles could explain this.”
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