Climate Care Innovations penalized $425,000 for violating Cap-and-Invest rules that preserve market integrity 

The Washington Department of Ecology issued a $425,000 penalty to Climate Care Innovations (CCI) for violating rules designed to ensure the state’s emissions market is both fair and secure. Ecology also revoked the registration that allows the company to participate in the market.   

Under Washington’s Cap-and-Invest Program, major sources of carbon emissions are required to obtain compliance instruments (allowances or offset credits), equal to their emissions. Transactions to obtain compliance instruments can involve millions of dollars, so the state enforces strict standards to protect the market’s integrity and security.   

Incorporated in Arizona, CCI registered for the Cap-and-Invest Program as an offset project operator using apparently inaccurate information. The company also falsely claimed to have over 3 million allowances, even though offset project operators cannot buy and sell allowances (they can only transfer offset credits). Additionally, CCI informed Ecology staff that it had entered into an allowance transaction with another market participant, despite never holding allowances.   

Ecology made numerous requests for documentation to verify CCI’s registration information and the purported allowance transaction, but CCI was unresponsive.   

“The success of the Cap-and-Invest Program depends on a secure, well-functioning market,” said Joel Creswell, program manager for the Climate Pollution Reduction Program. “CCI has not acted in good faith and refused to cooperate with us at every turn, so we must take action to maintain the integrity of our market and make sure that companies who follow the rules aren’t misled by those who do not.”  

In addition to this enforcement action, Ecology revoked CCI’s registration and issued further guidance to educate all Cap-and-Invest market participants about what actions offset project operators can and cannot legitimately take. Separately, the Arizona Corporation Commission issued a cease-and-desist order against CCI and other associated entities in relation to false claims regarding their allowance holdings.    

“We’re committed to vigorously protecting Washington’s carbon market against manipulation and fraud. We have a monitoring team that’s dedicated to making sure market participants provide accurate information and maintain consistent standards,” said Derek Nixon, who manages the Cap-and-Invest auction and markets team.  

CCI’s registration was revoked on Feb. 11, 2025, and the company was given 30 days to appeal this decision, which it did not do. CCI now has 30 days to appeal this penalty through Washington’s Pollution Control Hearings Board.