As Covid-19 spreads, the virus continues to have effects on and implications for ETSs around the world. Below ICAP has provided an overview the virus’ impact on different systems and the authorities’ responses. Longer-term allowance price developments can be viewed on ICAP’s Allowance Price Explorer.

North America

Neither California or Québec have announced plans to reschedule their next joint auction on 20 May 2020 or to delay compliance deadlines. Prices in the secondary market, where controls such as a price floor are not in effect, have fallen below the linked cap-and-trade program’s minimum price for 2020 of USD 16.68 in recent weeks. Prices between California and Québec move in tandem in joint auctions, and allowances issued by either government can be used for compliance across both systems.

On the US east coast, the Covid-19 crisis has not impacted RGGI’s auction schedule and compliance deadlines so far. According to the RGGI website, the next regular auction will take place as planned on 3 June 2020, and RGGI has not announced any delays to compliance deadlines.

Prices of RGGI allowances in the secondary market (front month spot prices) have slowly increased since the end of March after falling between the end of February and mid-March. In recent weeks, RGGI prices recovered to USD 5.31 (27 March-2 April period) and further increased to USD 5.68 (2-9 April period). However, prices remain below their USD 5.93 peak in late February.

North of the border, the Canadian environment ministry proposed to delay the 2019 reporting and compliance deadlines for the federal ‘backstop’ output-based pricing system (OBPS), giving large stationary emitters more time to procure offsets or surplus credits. Environment and Climate Change Canada filed a notice of intent indicating that the 01 June 2020 compliance deadline for 2019 emissions obligations under the OBPS would be pushed to 01 October 2020.

The Canadian province of Nova Scotia has not altered its plans to auction 640,000 permits in the cap-and-trade program’s first auction on 10 June 2020. All 2019 vintage units available for purchase will have a minimum price of CAD 20 per ton.


In March 2020, an auction of EU allowances (EUAs) and a UK auction of aviation allowances failed to clear, as volume bids fell short of the auction volume. However, the EU auction volume successfully cleared in subsequent auctions later in the month. The EU Commission announced in late March that it would not postpone the deadline for 2019 compliance.

EUA prices fell to about EUR 15 by 18 March following the announcement of increasingly restrictive virus-containment measures across EU Member States – a 36.5% drop compared to March’s price peak for EUAs observed eight days earlier. By mid-April prices recovered to around EUR 20.

The Swiss authorities have suspended the Swiss Emissions Trading Registry as of 18 March until further notice, and at least until the end of April 2020. Market transactions cannot be executed for the time being, although covered entities in Switzerland can still buy or sell allowances in EU market. The Swiss system does not have a secondary market.

Auctions scheduled for March as well as the compliance deadline of 30 April have been postponed to a yet to-be-announced date, giving covered entities more leeway in face of the economic downturn following measures to contain the virus. The latest auction results of 9-11 March 2020 have been invalidated, as the auction price cleared substantially below EUA prices in the secondary market. The decision was taken based on a provision in the revised CO2 Ordinance that has been in effect since the Swiss ETS became linked with the EU ETS in January 2020.

The registry link initially planned for May 2020 that will enable cross-border transfers between the EU ETS and Swiss ETS has been postponed to September 2020 following measures taken in response to the Covid-19 crisis. The Joint Committee — established by the linking agreement — announced the decision on 6 May 2020 and indicated that surrender obligations of entities regulated by either system remain unchanged.


The Korean ETS (K-ETS) market authority has extended the compliance period by one month to 31 July 2020 and has revised the monthly auction schedules in the run-up to the end of the compliance year. Korean Allowance Unit prices have remained stable, hovering around KRW 40,000 (USD 33) in March and April and climbing to KRW 40,500 (USD 33.3) by 8 April. The K-ETS monthly auction of April 2020 cleared at the highest auction price observed (KRW 41,000) since regular auctions commenced in January 2019.

In New Zealand, the Climate Change Commission – an advisory body to the government on all climate change matters – has called for developing a Covid-19 economic stimulus package to continue progress in addressing climate change. The Commission has provided a series of principles that officials should adopt when developing the package, including ensuring that the national ETS provides a clear signal for credible low-carbon investment. The Commission noted that this requires the completion of ongoing market reforms that are expected to pass through the Parliament in 2020.

New Zealand carbon allowances closed at NZD 24.57 on 20 April 2020 and have generally traded between NZD 24.00-24.50 in recent weeks, close to the NZD 25 price ceiling and well above NZD 22.20, where New Zealand allowances sold in March 2020 amid a major sell-off driven by Covid-19.

In China, some of the pilot ETS systems are shifting key program dates. The Beijing municipal government has pushed back the 2019 compliance deadline for its system to October 2020 and has decided to  delay introducing obligations for its aviation sector. In Guangdong province, the pilot ETS will hold the first of two planned auctions for the 2019 compliance year of its system on 27 April, the local emissions exchange said.

Prices across the Chinese pilots have ranged significantly, with some systems seeing price gains since mid-March on the week ending 17 April 2020, such as Shenzhen and Beijing, and others, such as Chongqing, showing declines.