Draft Regulation to amend the Regulation respecting a cap-and-trade system for greenhouse gas emission allowances

Public consultation from May 20 to July 3, 2026

In June 2023, Québec and the California initiated a process to assess the operating parameters of the Cap-and-Trade System for greenhouse gas emission allowances (C&T system). The objective of this approach is to ensure that the C&T system remains an effective tool that will contribute to achieving Quebec's GHG emissions reduction targets.

The draft Regulation reviews certain operating parameters of the C&T system.

It provides in particular for the reduction of the overall limit of the use of offset credits to cover greenhouse gas emissions and the requirement that a portion of this limit be reserved for credits issued by Quebec.

It also amends compliance periods, global warming potential values and rules pertaining to the disclosure of the business relationships of emitters and participants

In addition, the draft Regulation makes various amendments concerning the allocation without charge of emission units and the coverage of greenhouse gas emissions. In that regard, the draft Regulation makes changes, among other things, to the GHG emissions coverage requirement relating to the production of electricity acquired from a US state where producers are subject to a system established by an entity that is not a partner entity and are already covered under that system, as well as adjusts the activities that are eligible for the allocation in order to take those amendments into account.

Lastly, amendments are proposed with respect to projects to reduce greenhouse gas emissions and reduction-related research and development projects that are eligible for the payment of sums collected during an auction and reserved in the emitter’s name, both with regard to the terms and conditions for the eligibility of projects and those for reporting, the payment of sums and the eligibility of associated expenses.

The proposed amendments should increase the value of credits in Québec as well as favour project profitability and investments in new projects. The amendments will also impact the applicable administrative formalities, which will generate approximately $2,770 in additional costs for emitters, who can equally expect to benefit from some $743,000 in savings, for a total of $740,230 in estimated savings.

The draft regulation is published in the Gazette officielle du Québec for a 45-day public consultation period.

Further information on the draft Regulation may be obtained by contacting:

Kim Ricard, director
Carbon Market Division
Ministère de l’Environnement et de la Lutte contre les changements climatiques, de la Faune et des Parcs
kim.ricard@environnement.gouv.qc.ca

Any person wishing to comment on the draft Regulation is requested to submit written comments by July 3, 2026, to the following address:

Kim Ricard, director
Carbon Market Division
Ministère de l’Environnement et de la Lutte contre les changements climatiques, de la Faune et des Parcs kim.ricard@environnement.gouv.qc.ca