January 22nd, 2026

MONTHLY REVIEW

Happy New Year, ATB Carbon Commentary Readers!

We hope you had a wonderful holiday season and are off to a great start in 2026. Several market developments of interest have occurred since the holidays:

On January 6th, the federal government hosted a webinar providing an overview of proposed changes to the federal benchmark criteria for industrial carbon pricing. It is clear that an increase in stringency is planned.

Credit prices responded promptly to this news, and currently sit in the low $40s. A Discussion Paper covering these proposed changes is available on the Government of Canada website.

The table below summarizes the Discussion Paper, but we would like to highlight several items:

• The federal government proposes a dramatic reduction in the opt-out threshold for smaller emitters. Three options are currently under consideration, but all three of these options would bring almost all Canadian oil and gas companies back under an industrial carbon pricing framework

• Carbon credit prices are expected to track closely to the compliance price (currently $95/tonne). Large supply overhangs and annual surpluses in credit generation are not to be permitted

• “Direct Spend” on decarbonization projects (as proposed by the Alberta government) is to be allowed only as long as it does not weaken the carbon pricing mechanism

UPCOMING CREDIT SERIALIZATIONS

We anticipate approximately 6 million Vintage 2024 EPCs to eventually be serialized. To date, less than 20% of these have shown up in the registry (see charts below).

In 2025, 80% of the EPCs that were serialized showed up in the first half of the year. This was due to delays in serializing Vintage 2023 credits. Given the low serialization rate seen so far, this trend is likely to continue for Vintage 2024. We also expect some Vintage 2025 credits to be serialized in calendar year 2026.

In terms of offsets, Q2 has historically been a strong period for serializations.
Consequently, we anticipate a substantial volume of credits will be serialized in the first half of 2026. This should lead to a more balanced supply/demand dynamic leading up to the compliance deadline.

Doug Fremont

Director

Environmental Products

Fixed Income, Currencies & Commodities

dfremont@atb.com

587-582-0838

Chelsey Deng

Analyst

Commodities and Environmental Products

Fixed Income, Currencies & Commodities

cdeng@atb.com

368-996-6252

ATB's Carbon Trading Desk 

At ATB Financial, we actively engage with clients to navigate complex carbon markets, offering diverse solutions to meet their unique needs. Our team provides efficient, comprehensive market insights and strategic guidance, helping clients make informed decisions and capitalize on market movements to achieve their environmental and compliance objectives.

Our Strategy

• Broad Client Coverage: ATB has a wide range of clients with exposures to the Alberta TIER Market.
• Process Management and Documentation: ATB uses a Master Purchase and Sale Agreement for TIER deals, streamlining transactions and minimizing operational and legal effort for each deal.
• Price Transparency: ATB's extensive reach enables the provision of competitive pricing and market transparency for our clients.
• Trusted Name: Credit and legal risks are minimized when dealing with ATB.