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The Carbon Market

Offset Credits

Register of Offset Credit Projects

Process Leading to the Issuance of Offset Credits

Documentation

Frequently Asked Questions (PDF, 681 KB)

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The Québec cap-and-trade system for greenhouse gas (GHG) emission allowances comprises an offset credit component, which enables the implementation of offset credit projects by promoters, voluntarily, to reduce GHG emissions or remove GHG from the atmosphere in sectors of activity or sources other than those subject to compliance obligations of the Regulation respecting a cap-and-trade system for greenhouse gas emission allowances. Those projects lead to the issuance of offset credits, which can be sold to covered emitters subject to the Regulation in order for these to use such credits for meeting their compliance obligations.

The objectives of the offset credit component are to decrease compliance costs borne by emitters, without undermining the system’s environmental integrity, to support emission reductions in sectors not subject to compliance obligations as well as to encourage investment in low-carbon projects in Québec.

The use of offset credits as a means of regulatory compliance has been limited to 8% in order to maximize emission reductions achieved by emitters and generated by sources covered by the cap-and-trade system.

Main requirements

Only offset credit projects meeting the conditions described in Chapter IV of Title III of the Regulation and covered by one of the protocols listed in Appendix D of the Regulation are eligible to receive offset credits.

Furthermore, promoters must first be registered in the CITSS system and have an active account.

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Current offset credit protocols

The implementation of offset credit projects is governed by a protocol that determines the rules and requirements to be followed, inter alia regarding project eligibility and quantification, reporting and verification of emission reductions, in order to ensure the quality of credits to be issued, enabling their fungibility in the regional carbon market of the Western Climate Initiative (WCI) which the Québec cap-and-trade system is part of.

The Regulation lists five offset credit protocols:

  • Protocol 1 - Covered manure storage facilities – CH4 destruction;
  • Protocol 2 - Landfill sites - CH4 treatment or destruction;
  • Protocol 3 - Destruction of ozone depleting substances (ODS) contained in insulating foam or used as refrigerants removed from refrigeration, freezer and air-conditioning appliances;
  • Protocol 4 - Active coal mines – Destruction of CH4 from a drainage system;
  • Protocol 5 - Active underground coal mines - Destruction of CH4 from ventilation air.

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Current results

The following table shows all offset credit projects registered and offset credits issued since the beginning of the offset credit component on January 1st, 2014.

Offset credit projects and credits issued on June 10th, 2020

Protocol

Project title Credits issued (tCO2e)
Landfill sites – CH4 treatment or destruction
LE001 – Reduction of GHG emissions at the Marchand sanitary landfill site 60,579
LE002 – Reduction of GHG emissions at the sanitary landfill site and the engineered landfill site of La Lièvre 38,232
LE003 – Capture and destruction of biogas – Area B of RDL engineered landfill site 67,284
LE004 – Reduction of GHG emissions at the Saint-Raymond sanitary landfill site 16,754
LE005 – Reduction of GHG emissions at the Marchand engineered landfill site 34,920
LE006 – Reduction of GHG emissions at the Saint-Flavien engineered landfill site 27,395
LE007 – Reduction of GHG emissions at the Gaspé engineered landfill site 21,132
LE008 – Capture and destruction of biogas – Nouvelle-Beauce engineered landfill site 38,373
LE009 – Reduction of GHG emissions at the Val d’Or engineered landfill site 24,588
LE010 – Capture and destruction of biogas from the Neuville closed landfill  
LE011 – Capture and destruction of biogas from the Robertsonville sanitary landfill site 4,794
LE012 – Capture and destruction of biogas from the Ragueneau engineered landfill site 8,057
Destruction of ozone depleting substances SACO001 – ODS extraction and destruction 161,510 
SACO002 – Extraction and destruction of ODS contained in isolating foam or used as refrigerants 322,943
SACO003 – Extraction and destruction of ODS contained in isolating foam or used as refrigerants 50,165
SACO004 – ODS extraction and destruction  
Total 876,726

For more details on offset credit projects submitted, please refer to the Register of Offset Credit Projects.

To find out the steps of offset credit project implementation, read the Process Leading to the Issuance of Offset Credits.

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Process for developing an offset credit protocol

The Ministère is responsible for developing offset credit protocols. Members of the public may submit their vision, comments and needs regarding the subject to the Ministère at any time.

While developing an offset credit protocol represents a large amount of work, existing protocols on voluntary and regulated markets can serve as a basis and be used as references.

Nonetheless, a good deal of work is involved since protocols must be adapted to the requirements of the WCI carbon market and the specificities of Québec. Once the technical version of a protocol has been completed, it must be incorporated into a draft regulatory amendment and go through public consultation. Before the protocol can be enacted in the Regulation, the briefs that have been received must be analyzed, which may involve making technical or legal modifications to the protocol to be enacted.

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Work in progress

In order to make a larger number of offset credit projects possible and increase the Québec supply of offsets, the Ministère wishes to develop new offset credit protocols or improving the protocols that are in force.

Firstly, a protocol for carbon sequestration through afforestation and reforestation on private lands in Québec is currently being developed. A technical version of a draft protocol was designed in collaboration with the Ministère des Forêts, de la Faune et des Parcs (MFFP). A draft protocol in regulatory format, currently in preparation, will undergo a public consultation at a later date.

The draft afforestation and reforestation protocol takes an innovative approach to quantifying the effects of the GHG removals achieved by carbon sequestration. The approach, based on radiative forcing, provides rewards for climate benefits actually achieved at the time of issuance of offset credits. This allows for avoiding the traditional 100-year permanence obligation, in addition to giving promoters greater flexibility in implementing their projects. It is also more financially advantageous than the traditional approach for projects having characteristics that are typical of Québec, as evidenced by a comparative financial analysis conducted by the MFFP.

Secondly, And in light of the types of applicable projects in Québec and the potential for GHG emission reductions or removals, the project types listed below have been selected to be analyzed for their feasibility and relevance or for development technical work:

  • Biomethanation or composting of organic waste;
  • Substitution of fuels in the maritime transport sector;
  • Conversion of refrigeration systems;
  • Improvement of agricultural fertilizer application practices;
  • Afforestation and reforestation on public lands.

It is important to note that these types of projects will not all necessarily be subject to a protocol. As the analysis progresses, more information may be published. Some project types might be removed or added based on the outcome of the work and the workload.

Lastly, offset credit protocols that are currently in force will also be analyzed. This will allow for assessing what improvements can be made, for example extending the protocol’s scope or clarifying, easing or tightening certain provisions in order to have updated protocols that foster generating more Québec offsets, while at the same time maintaining offset credit quality and environmental integrity. Any proposed changes will be subject to a regulatory amendment and public consultation.

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Proposing activities that could be considered for offset credit protocols

Suggestions may be submitted for activities that could eventually be subject to protocols. In order to be considered, the proposed activity must not be covered by regulatory requirements imposed by Québec’s cap-and-trade system or any other Québec laws, regulations or permits, or those of its partner jurisdictions. Additionally, the activity concerned must at a minimum meet the main criteria required for the issuance of offset credits: GHG emission reductions or removals must be additional, real, verifiable and permanent.

When proposing the development of a new offset credit protocol, it is therefore recommended that the following information be provided so that a comprehensive assessment of the request can be performed:

  • Potential for GHG emission reductions or removals in Québec;
  • Detailed description of the activity eligible for the issuance of offset credits, and description of the reference scenario;
  • Issues related to the reference scenario and project scenario;
  • Quantification methodology;
  • Monitoring and accountability.

In cases involving the adaptation of an existing protocol on voluntary or regulated markets, the name of the program issuing the offset credits must also be provided along with the title and version of the protocol to be assessed.

Once this information is received, the Ministère will be able to determine whether the project submitted offers significant potential for GHG emission reductions or removals. If so, it could be added to a list of projects that might eventually be subject to an offset credit protocol.

Although activities that could eventually be subject to an offset credit protocol may be proposed, priority is given to offset credit protocols that are currently being developed.

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