Washington state regulators have banned an Arizona-based company from participating in its carbon market, accusing it of falsely claiming ownership of nearly $200 million worth of greenhouse gas allowances it never held.
The Department of Ecology issued a $425,000 fine last month to Climate Care Innovations (CCI) and permanently barred it from the state’s Cap-and-Invest carbon program.
The move marks the first time Washington has banned a company from its carbon market, reflecting growing scrutiny over carbon trading fraud.
According to Derek Nixon, responsible for the state’s carbon market at the Department of Ecology, CCI was never part of the market. “This was fishy,” Nixon was quoted as saying by the Seattle Times.
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The investigation began in December 2024, when CCI emailed Ecology asking how to sell millions of carbon allowances—permits required by polluters to emit greenhouse gases.
But CCI wasn’t a registered entity in the carbon market and, as an offset project operator, was legally barred from holding or selling allowances.
Despite this, the company’s website claimed to possess more than 3.3 million allowances, potentially worth over $195 million based on recent auction prices.
Regulators say those claims were false and potentially aimed at misleading investors or buyers.
John Jensen, chair of CCI, denies wrongdoing and described the situation as the result of “clerical errors and miscommunication”.
In a phone interview with Seattle Times, Jensen said he plans to sue Ecology, stating that “the fine adds insult to injury.”
Meanwhile, CCI and related firms under Jensen’s “Prolific Fund” umbrella are facing broader scrutiny.
The Arizona Corporation Commission has issued a cease-and-desist order accusing Jensen and his partners of securities fraud, tied to exaggerated claims of carbon credit ownership and unauthorized sales.
Washington officials say they have updated vetting procedures and issued warnings to other participants in the market.
