Washington, California, and Québec sign agreement to link carbon markets
On 25 June 2026, Washington, California, and Québec signed an agreement to link Washington's Cap-and-Invest Program with the California-Québec carbon market. Washington State Department of Ecology Director Casey Sixkiller signed the document at an event in Seattle, joined by Washington Governor Bob Ferguson and representatives of the Québec and California governments.
California and Québec launched their carbon markets in 2012 and 2013, respectively, and have been linked since 2014. Washington's Cap-and-Invest Program was established under the state's Climate Commitment Act (CCA) in 2021. The CCA requires Washington to consider linking its program with other carbon markets. The three jurisdictions began linkage discussions in 2024, and Washington subsequently carried out further analysis and public consultation before deciding to pursue linkage with California and Québec.
When the link becomes operational, allowances and offset credits issued in any of the three jurisdictions can be used for compliance in the other two. The jurisdictions will hold joint allowance auctions and share a common allowance price at these auctions, and market participants will be able to trade allowances across jurisdictions in the secondary markets.
Signing the agreement is a major milestone, but it is not the final step. In Washington, the CCA specifies that the linkage agreement is the step that authorizes the state's program to accept allowances and offset credits from California and Québec. Washington's Department of Ecology submitted its regulatory proposal on 1 June and intends to adopt the rule on 23 September. In California, the state's governor must first make positive linkage findings under Senate Bill 1018, after which the California Air Resources Board (CARB) will begin its formal linkage evaluation on 1 September, in line with its broader schedule for updating the state's carbon market program. Québec must also complete corresponding regulatory steps to recognize compliance instruments from Washington.
Officials from all three jurisdictions expect the linked market to begin operating in 2027.
