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C&I Program: Cement Industry Allowance Allocation Model
[Version 2.0 | Updated as of 08.21.26]
This tool projects the cement industry's allowance allocation position under various regulatory and decarbonization scenarios.
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About This Tool: This tool estimates the industry's allowance allocation position under different regulatory, decarbonization, and allowance price assumptions. It is a directional planning tool designed to illustrate the potential impacts of various scenarios — not a forecast of future conditions.
Key Assumptions: (1) the California cement industry's output remains constant over the forecast period; (2) the industry benchmark remains fixed at 0.818 MT of GHGs per MT of cement output; (3) the industry's Assistance Factor remains at 100% except in specific scenarios where it is deliberately adjusted; (4) allowances are valued using a single, user-selected average carbon price applied uniformly across all years (2013–2045) rather than a year-by-year price forecast, so cumulative dollar figures are simply the cumulative physical surplus or deficit multiplied by that one price — not discounted for time value of money, and not reflecting any allowance banking or borrowing between years. It also does not account for increased allowances associated with indirect electricity-related GHG emissions, as the value of such allowances are assumed to be offset by a decrease in electricity bill refunds from the CPUC.
Confidentiality: This tool was prepared by Keybridge for the exclusive use of CSCME members. It is confidential and proprietary, and it should not be quoted, cited, reproduced, or shared outside CSCME member companies. It reflects Keybridge's interpretation of the Final Regulation Order and is provided for general informational purposes only. CSCME members should consult their own legal, regulatory, and/or financial advisors before acting on any information provided by the tool.
1Adjust Key Assumptions
Pick one regulatory scenario, one decarbonization scenario, and a single allowance price for valuing allowances. The benchmark (0.818 MTCO2e/MT cement) and cement output are fixed and not user-adjustable. 2013–2031 (CAF) and 2013–2030 (assistance factor) are locked by the adopted regulation in every scenario and never change.
Determines the CAF and assistance-factor path for the years the adopted regulation hasn't fixed yet (2032–2045, and 2028–2030 in the case of the 45-Day Proposed Regulation scenario).
Compounding annual decline in GHG intensity from the 2025 baseline (0.75 MTCO2e/MT cement). A business assumption, not a regulatory parameter.
The average carbon price for the entire forecast period, which is used solely to monetize the value of allowance balances to illustrate order of magnitude. It should not be viewed as a substitute for a detailed price forecast over time and/or discounted NPV analysis.
Result Under Current Settings
These figures describe an industry-average facility.
A plant whose carbon intensity is above or below the industry baseline will differ from
this, in some cases materially. This tool is not a substitute for a plant-level analysis.
2045 Allocation Rate industry avg.
Allowances / MT Cement (AF × CAF × Benchmark)
2045 Annual Surplus/Deficit industry avg.
Allowances Generated Minus Covered Obligations
2045 Annual Value industry avg.
At the Selected Allowance Price
Average Annual Value, 2013–2045 industry avg.
Cumulative Value ÷ Years — Same Basis as the Compare Matrix
Million MTCO2e (left axis) / $ Millions (right axis), Running Total 2013–2045 · Current Settings (@ $100 per Allowance)
SurplusDeficit
The right-hand $ axis is this physical surplus/deficit multiplied by the single Allowance Price selected above — not an independent measure. It rescales whenever that price changes, so the price is always stated in the subtitle above.
The four escalation paths are illustrative only, anchored to the 2027 historical settlement price and compounding annually thereafter. They are intended to be reference points across a range of plausible scenarios, not a forecast of actual outcomes.
Usage Log
Every Scenario, Side by Side
Rows are the five regulatory scenarios from the Explore tab; columns are the four decarbonization scenarios. Each cell is the average annual value of the allowance surplus/deficit over 2013–2045 (the cumulative value for that combination divided by the number of years) — using the model's default $100/MTCO2e valuation price, independent of the Allowance Price slider on the Explore tab, so the matrix isolates only the regulatory and decarbonization variables. The outlined cell is the Current Regulation (Baseline) / 2%-per-year reference point. 2013–2031 CAF and 2013–2030 assistance factor are identical across every cell — fixed by the adopted regulation — and the benchmark is fixed at 0.818 throughout.