Washington State’s premium carbon offsets with direct environmental benefits to the state (DEBS) are projected to surpass $100 per tonne of CO₂ equivalent (tCO₂e) in the early 2030s, according to a new market forecast from analytics firm cCarbon. The estimate is based on an assumed linkage between Washington’s cap-and-invest system and the California-Quebec cap-and-trade programme by 2027—a step that the state’s Department of Ecology has signalled is achievable.
Harry Horner, cCarbon’s head of strategy, told participants in a recent webinar that prices could climb to $120–130/tCO₂e 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 short term but cautioned that oversupply risks could emerge from 2035 onwards. The credit bank is expected to peak in 2037, yet the long-term outlook remains strong, with projections suggesting prices could exceed $150/tCO₂e by the mid-2040s—more than triple today’s levels.
The cCarbon report noted: ‘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.’
Meanwhile, California carbon offsets (CCOs) with DEBS are forecasted to take longer to hit the $100/tCO₂e threshold, likely reaching it in the latter half of the 2030s. Prices are expected to peak before declining in the 2040s—still more than four times higher than current levels. Presently, CCO-0 non-DEBS trade at $12.80/tCO₂e, while CCO-0 DEBS fetch $24.75/tCO₂e.
Analysts stressed that the direction of California’s post-2030 offset policy will be the key price driver, with potential outcomes ranging from $90 to $145 by 2035. Early clarity in rulemaking and active stakeholder engagement are expected to play a crucial role in shaping the market.
Washington’s cap-and-invest programme, which began in 2023, covers about 70% of statewide emissions and aligns with the target of cutting emissions 95% below 1990 levels by 2050. If the linkage process proceeds on schedule, Washington could join the California-Quebec joint market as early as 2027.