Analysts expect the volume of carbon trading in the US to double this year in line with the emergence of a new market across the five states and Canadian provinces that make up the Western Climate Initiative (WCI).

Thomson Reuters Point Carbon said that while a national trading scheme is not on the agenda due to the US presidential elections in November, it predicts substantial growth in the regional markets.

It estimates the WCI will overtake the Regional Greenhouse Gas Initiative (RGGI), an agreement between nine north-eastern states to reduce CO2 emissions from the power sector by 10 per cent by 2018, to become the biggest North American carbon market in value terms.

WCI members are considering implementing a cap-and-trade programme to reduce their emissions, with California bringing power generation and large industrial facilities into the scheme from 2013, before adding emissions from the combustion of fuels, including transportation fuels, in 2015.

In the lead up to the full launch of the scheme, Point Carbon forecasts 24 million metric tons (Mt) of allowances for 2013 will be distributed in early auctions in California and Quebec later this year.

While the remainder of the 180 million ton cap is expected to be either auctioned next year or distributed for free, the transactions are expected to dominate the market, swelling it tenfold year-on-year to $392m.

Point Carbon estimates the total North American carbon market volume traded will be 179 million Mt with a value of $782m, a figure roughly double the volume and value of the market in 2011.

“For US carbon markets, 2012 will be an important year with several key policy decisions due and significantly increased volumes of trade expected as a result of two WCI allowance auctions and increased activity in the secondary market,” said Point Carbon’s North American carbon market analyst Ashley Lawson.

The forecasts come a day after figures compiled by the company found strong growth in Europe increased the volume of carbon traded on the worldwide markets by 19 per cent, although overall value only increased by four per cent due to plummeting prices.

Oversupply has been blamed for the low price of carbon, which saw a tonne of carbon plunge to a record low of €6.30 in December. Analysts at Bloomberg New Energy Finance predict the ETS will be oversupplied by 997 million metric tons, or 9.6 per cent, from 2008 to 2012.

Industry leaders are now worried that the EU’s new energy efficiency directive could make matters worse and have called for action to support the carbon price.

The EU has been considering a number of steps to help drive up the carbon price and it emerged today that the European Parliament will vote in March on whether to back a draft amendment that would introduce a temporary cut in the supply of carbon allowances.

“It’s a very controversial question; the amendment will go to vote in ITRE [the parliament’s committee on industry] and most likely in the plenary later,” Claude Turmes, a Green Party MEP, told news agency Bloomberg. “It won’t be possible to have any compromise amendments on this, so it will be a clear-cut vote, which will be either won or lost.”

The EU has also warned 17 member states they must submit their plans on allocating free carbon permits to companies by March 1 or face “possible further action”.

In a statement it revealed of the 27 member countries, only 10, including the UK, have given notice of their national implementation measures for the period from 2013 to 2020. The original deadline passed on 30 September.