The Nitric Acid Climate Auctions Program (NACAP) has released details on the upcoming auction of options to sell eligible nitrous oxide emission reductions from nitric acid plants.
The NACAP is planning to hold at least one reverse auction in the winter or spring 2019 to sell put options which would give the option holder the right, but not the obligation, to deliver eligible carbon credits to the NACAP in the future.
In a reverse auction, eligible bidders would compete to determine the level of the put option strike price. The starting price of the auction will likely be between $US15 and $US8.
Auction winners will have to pay an option premium of $US0.06 per carbon credits upfront to purchase the put options.
Carbon credits will have to satisfy a set of eligibility criteria at the time of redemption. You can find more details on these criteria and the auction parameters on the NACAP website.
Furthermore, the NACAP Secretariat is planning a series of informational webinars ahead of the auction. The first of these webinars will take place on June 6, 2018, at 9 am EST.
