Guides
Carbon costs at the pump: what Washington's records show
Test a state carbon market fuel price claim with Washington's records: 2026 auction settlement prices, clean fuel credit prices, bidder lists and filings.
What to take away
- A seller who blames Washington's carbon program for a fuel price is making an advertising claim, and public records let you test it.
- Two carbon costs sit in fuelClimate Commitment Act allowances and Clean Fuel Standard credits.
- Ecology's September 2, 2026 auction settled below the June result, which lowers the allowance ceiling per gallon.
- Ecology's own report calls the Clean Fuel Standard cost per gallon minimal.
- No official number states a pump surcharge. The records give a ceiling and context, not a seller's markup.
Four records that test a surcharge claim
A claim that Washington's program raised a fuel price rests on three facts: the program covers that seller's fuel, its cost moved, and the seller passed some of it on. Four public records speak to those facts.
| Record | Publisher | What it shows | What it cannot show |
|---|---|---|---|
| Auction summary report | Department of Ecology | Settlement price per allowance and the qualified bidders | How much any bidder passed on |
| Clean Fuel Standard progress report | Department of Ecology | Credit volumes, average credit prices, cost per gallon estimates | One retailer's own costs |
| Form 10-K | The company, filed with the SEC | Material compliance costs in risk factors and MD&A | A per gallon figure, unless the company gives one |
| Receipt line or price notice | The seller | That the seller attributes a charge to the program | That the charge equals the program cost |
Does the program cover the fuel at all?
Yes for gasoline and diesel. Washington's Climate Commitment Act became law in 2021 as Senate Bill 5126. It caps emissions and makes fuel suppliers buy allowances at quarterly auctions run by the Department of Ecology.
Covered entities include fuel suppliers that bring at least 10,000 metric tons of carbon dioxide equivalent into the state in a year. Each allowance represents one metric ton, and suppliers must surrender allowances equal to their reported covered emissions. One clearing price applies to all winning bids, and allowances can be resold between auctions.
The law survived a repeal attempt. Initiative 2117 was a failed ballot initiative that appeared on the November 5, 2024 ballot, so the auctions continue. The statutes and the vote are set out in the Climate Commitment Act explainer.
The allowance prices Ecology published in 2026
Ecology issues a summary report a week after each auction, and its settlement price is where a surcharge claim should start. The two most recent reports show a sharp fall in the allowance cost.
- Auction #14, held June 3, 2026all current vintage allowances offered by Ecology sold, at a higher settlement price than in September.
- Auction #15, held September 2, 2026the Auction #15 summary report gives a settlement price for current vintage allowances of $39.50 per allowance.
- Auction #16Ecology's 2026 calendar lists it for December 2, 2026, and notes that the information is subject to change.
A seller citing a rising carbon cost this autumn is citing a cost that fell at the last auction. That alone does not prove the pump price should drop at once, because pass through varies by company, contract, and timing. It is still a fair question to put to the seller.
Turn the settlement price into a ceiling per gallon
The arithmetic gives an upper bound. If a surcharge is larger than the full allowance cost per gallon, the allowance price alone cannot explain it.
One allowance equals one metric ton of carbon dioxide equivalent.
- Burning one gallon of gasoline releases about 8.89 kilograms of carbon dioxide.
- Divide by 1,000 to get 0.00889 metric tons per gallon.
- Multiply by the settlement price in the latest Ecology summary report.
At the September settlement price, the result is roughly 35 cents per gallon if a supplier passes through the full cost. Diesel carries a higher carbon factor, about 10.18 kilograms per gallon, so its ceiling is higher at the same price.
These are ceilings for the allowance layer, not a measure of what any seller charged. Ecology's fuel report cites Argus, a company that analyses oil and gas prices, whose Cap-at-the-Rack method distributes the full price of an allowance to fuels per gallon. The same conversion applies to cap-and-trade programs in other states.
The second layer: Clean Fuel Standard credits
Washington also enforces a Clean Fuel Standard, a separate cost with its own price. Suppliers that fall short of the annual carbon intensity target buy credits from cleaner fuel producers, so two carbon costs can sit inside one wholesale price.
Credit prices have fallen. Ecology's 2024 Clean Fuel Standard progress report says over 3 million credits were generated in 2024 at an average of $46 a credit. That was a 50% lower average credit price than in 2023, as the supply of credits outran deficits.
The same report weighs the per gallon effect. Its consultant, Greene Economics, estimated from Argus figures that the standard contributed 1% of total price changes in 2024. The report calls the compliance cost minimal per gallon, so a seller blaming clean fuel credits should show its own number. The policy tools reporters cite differ in this way.
Who actually buys the allowances
Ecology names its qualified bidders, which shows whether a company in a claim takes part in the market. The Auction #15 report lists 37 qualified bidders and notes that they may or may not have participated in the auction.
The list includes fuel companies such as Phillips 66 Company, Marathon Petroleum Company LP, Par Petroleum, LLC and HF Sinclair Puget Sound Refining LLC, beside utilities and trading firms. A retailer missing from the list can still carry the cost through the wholesale price it pays to suppliers that are on it.
For public companies, the SEC's EDGAR company search pulls the 10-K. Risk factors fall under Item 105 of Regulation S-K and MD&A under Item 303. SEC staff interpretations of Regulation S-K explain what belongs in both sections when carbon compliance costs are material.
Questions to put to the seller
Some retailers print a carbon or climate surcharge as a separate line on a receipt. When a business attributes a price increase to a state program, that statement counts as advertising, and it needs evidence behind it.
The FTC Policy Statement Regarding Advertising Substantiation requires advertisers to have a reasonable basis for claims before they are disseminated. Its rules on business claims point to the seller's own record of what the program cost it. Four questions turn that into a check.
- Which layer the charge coversallowances, Clean Fuel Standard credits, or both.
- Which settlement price or credit price the seller used, and from which month.
- Whether the charge per gallon stays below the ceiling from the arithmetic.
- Whether the line changed after the September 2026 auction settled lower.
What remains genuinely uncertain
Three pieces stay open. The allowance price changes at every auction and in secondary trading. Lawmakers have discussed linking Washington's market with California and Quebec, which would shift prices and rules. And the share that any one retailer passes through is a private pricing decision.
- The next auction settlement price.
- Whether linkage talks produce an agreement.
- How much of the cost each supplier absorbs.
Common questions
Is there an official per gallon surcharge?
No. The state publishes allowance prices, not pump surcharges. The per gallon effect depends on the allowance price, the fuel's carbon content, and the supplier's pricing decisions.
Does a carbon line on a receipt prove the program raised the price?
No. It shows the seller's attribution, which is an advertising claim. The supporting evidence sits in the seller's records and, for public companies, in their filings.
When does Ecology publish auction results?
A week after each auction. The June 3, 2026 auction report was issued on June 10, and the September 2 report on September 9.
Can the program change?
Yes. Washington voters rejected a 2024 initiative that would have repealed the Climate Commitment Act, and lawmakers can still amend the program or link it to other markets.
