In 2013, Québec set up a cap-and-trade system for greenhouse gas (GHG) emission allowances (the C&T system). Québec’s market is integrated with California through the Western Climate Initiative. This joint market is the world’s only carbon market designed, developed and operated exclusively by subnational governments in different countries. It covers more than 48 million people and C$3.6 trillion in GDP. Ontario was a part of this market from January 1, 2018, until July 3, 2018.
Québec’s market with California is governed by an agreement that allows joint auctions of emission allowances as well as harmonization of regulations and reporting. Companies impacted by the system include industrial producers and fossil fuel distributors. A minimum price of $10.75 per metric ton of carbon dioxide (CO2) equivalent was set during the first year of operation (2013), with prices scheduled to increase by 5% (plus inflation) per year until 2020.
The carbon market is intended for the following emitters:
- Industrial establishments that emit 25,000 metric tons or more of CO2 equivalent annually.
- Electricity producers and importers that emit 25,000 metric tons or more of CO2 equivalent annually.
- Distributors of fossil fuels used in Québec (gasoline, diesel fuel, propane, natural gas and heating oil). Distributors are required to cover the GHG emissions resulting from the products they distribute.
The C&T system covers approximately 80% of GHGs emitted in Québec.
- As of 2019, industrial establishments that declare annual emissions of more than 10,000 tonnes of CO2 equivalent, but less than the reporting threshold of 25,000 tonnes of CO2 equivalent, can voluntarily register to the carbon market to become emitters subject to the C&T system.
- The carbon market is also accessible to natural and legal persons who wish to participate even if they do not have a regulatory obligation to fulfill (e.g., investors, brokers, consultants, etc.).
The Green Fund
Created in 2006 by the Act respecting the Ministère du Développement durable, de l’Environnement et des Parcs (the Act), the Green Fund aims to further sustainable development in the province and to protect the environment, preserve biodiversity and fight against climate change.
In 2017, the Act was amended to create a management board – the Conseil de gestion du Fonds vert (CGFV). Additionally, the Act now establishes governance and management structures for the Green fund. Further, the Act provides that revenues from the Green Fund will be allocated to funding measures related to tackling climate change and preventing GHG emissions, amongst other things.
2013-2020 Climate Change Action Plan
The 2013-2020 Climate Change Action Plan (the Plan) is the province’s main tool for addressing climate change. The Plan includes 30 priorities and more than 150 actions.
More than 20 programs and initiatives have been launched to address the following challenges:
- Reducing fossil fuel consumption and improving the energy efficiency of buildings, industrial processes, and vehicle fleets.
- Providing greater support for the development of mass and active transit.
- Accelerating the electrification of transport and the creation of new companies in this field.
- Expanding the use of renewable energy sources in all activity sectors.
- Encouraging research and development in the field of clean technology.
- Having a proactive approach with respect to climate change adaptation. In addition to the actions set out in the 2013-2020 Climate Change Action Plan, Québec also defined its first adaptation strategy in June 2012 through the 2013-2020 Climate Change Adaptation Strategy.
2030 Energy Policy
On April 7, 2016, the Government of Québec announced its 2030 Energy Policy. The goal of the policy is to make the province a North American leader in renewable energy and energy efficiency by 2030.
To achieve this goal and meet the policy’s targets, the province has identified four key strategic initiatives:
- Integrated governance to manage the low-carbon economy transition – The province will establish a new agency to manage the transition and promote energy conservation, review the role of the existing Régie de l’énergie, and look to modernize the process for authorizing future energy projects. The new provincial agency will assist in co-ordinating targeted research and development in the areas of energy efficiency, electric vehicles and processes, electricity use and storage, and renewable energy output.
- Promoting the low-carbon economy – The province will influence the energy consumption and choices made by consumers and industrial enterprises and review the provincial government’s own energy consumption. The use of thermal coal will be eliminated, and the quantity of oil found in products used in the province will be reduced by 40%.
- Offer consumers a renewed, diversified energy supply – The province will increase green energy electricity offerings to residential, institutional, commercial and industrial consumers, as well as capitalize on the potential for energy from biomass. Specifically, the policy outlines the creation of 25% more renewable energy, with a 50% increase in biomass energy. The province will also seek to diversify and enhance its natural gas supply.
- Define a new approach to fossil energies – The province will enforce stringent technical and environmental standards to ensure the safe transportation of hydrocarbons. It will also adopt new procedures related to territorial planning and public participation for energy resource development projects to create social acceptability in host communities.
The Transportation Electrification Action Plan
The Transportation Electrification Action Plan 2015-2020 seeks to:
- increase the number of electric and rechargeable hybrid vehicles registered in Québec to 100,000 by 2020
- reduce the annual GHG emissions from the transportation sector by 150,000 tonnes
- reduce the amount of fuel consumed annually by 66 million litres
- establish 5,000 jobs in the electric vehicle industry with total investments of $500 million
The Maritime Strategy
The Maritime Strategy is a plan to enhance the energy efficiency of maritime transport through the use of new energy sources, including liquefied natural gas.
The Société du Plan Nord works to ensure electricity and natural gas supply to municipalities in the Moyenne-Côte-Nord and Basse-Côte-Nord regions and Québec’s northern mines.