On May 4, 2022, the Government of Québec published in the Gazette officielle du Québec the draft regulation amending the Regulation respecting a cap-and-trade system for greenhouse gas emission allowances.
This draft regulation primarily proposes a new approach for free emission allowances for 2024-2030 to meet Québec’s 2030 reduction targets.
In summary, the government plans to reduce free emission allowances for large industrial companies and to set aside, on their behalf, a portion of the reduced units to finance their climate transition. For all large industrial companies, the average annual reduction in the free allowance should be 2.7% for the target period.
The rate of reduction of the free allowance would be adjusted according to the risk of facility relocation. To adapt to business realities, the most recent GHG emissions performance would also be gradually incorporated into the free allowance calculation. The report on the impacts of the rules regarding free allowances for 2024-2030
(in French) details the assumptions and calculation rules.
The draft regulation is also proposing changes to CATS registration, the rules for participating in auctions, and emission coverage requirements.
The 45-day public comment period will end on June 18, 2022
, the deadline for submitting comments to the Ministère de l’Environnement et de la Lutte contre les changements climatiques.
The draft regulations and all related documents can be found here