Changes in the Cap and Trade System prices

Over the last three months, a notable increase of US$5.09 has been seen in the price of emission units in the secondary market, from US$19.93 on May 28, 2021, to US$25.02 on August 31 (+26%). During that period, the price increased gradually to reach US$24.30 on July 7. After that, the price stabilized in anticipation of the August 18 auction. Then, from August 24 on, increases resumed and prices rose even more, following the announcement that day of the results of the auction, to reach a maximum of US$25.55 on August 30, 2021.

The third auction of 2021 was held on August 18, 2021. The final sales price of current vintage emission units was set at US$23.30 (C$29.41), while the price of future vintage emission units was set at US$23.69 (C$29.90). Note that the ratio of accepted offers compared with the number of units sold at the auction was 185% for current vintage units and 145% for future vintage units, showing a growing market demand for emission units.

Ongoing consultations

Several consultations are taking place that concern the carbon market in Québec. Among others, the Federal Minister of Finance published a consultation document on August 5, 2021, that proposes a mechanism to establish border carbon adjustments for Canada. To consult the document, click here.

In Québec, the Ministère de l’Environnement et de la Lutte contre les changements climatiques (MELCC) published, in the Gazette officielle of August 4, 2021, the draft regulation respecting afforestation and reforestation projects eligible for the issuance of offset credits on privately owned land.

The public consultation on the draft regulation concluded on August 18, 2021. The complete documentation on the regulation can be consulted on the MELCC Internet site by clicking the link. A webinar on this subject, held on Tuesday, September 2, is also available (in French) on the MELCC Internet site.