Another perfect score for the third carbon market compliance period: 100% of emitters have covered their greenhouse gas emissions

QUÉBEC, Nov. 5, 2021 /CNW Telbec/ - The Ministère de l'Environnement et de la Lutte contre les changements climatiques (MELCC) has announced that, for the third consecutive compliance period, 100% of the emitters concerned surrendered the emission allowances needed to cover their greenhouse gas (GHG) emissions, in compliance with the requirements set out in the Regulation respecting a cap-and-trade system for greenhouse gas emission allowances.

The perfect score means that all emitters covered have either:

• Reduced their GHG emissions;
• Purchased emission allowances at government auctions; or
• Purchased emission allowances from another company.

On the carbon market, an emission allowance is equivalent to one tonne of GHGs emitted into the atmosphere. Therefore, the 126 Québec emitters covered by the carbon market in 2018, 2019 and 2020 had to surrender 178.2 million emission allowances, i.e., one eligible emission allowance for each tonne of CO₂ equivalent emitted into the atmosphere during the third period.

A 100% compliance rate was also observed in California, Québec's partner in the Western Climate Initiative Regional Carbon Market, demonstrating that companies in Québec and California are embracing the carbon market as an economic tool in the fight against climate change. A detailed report on emission coverage will be made public on the MELCC website on December 1.

Major industrial emitters and fossil fuel distributors had until November 1, 2021 to surrender to the government the emission allowances corresponding to the emissions they reported and verified in 2018, 2019 and 2020.

Quick facts:

• The effectiveness of the carbon market is based on capping the emission units put into circulation. These caps decrease annually. Over the 2018-2020 period, the Québec and California caps collectively decreased by more than 28 million units, thereby requiring reporting emitters to achieve an equivalent number of reductions in the regional space created by the linkage of the Québec and California carbon markets.
  
  
• The fourth compliance period began on January 1, 2021, and will end on December 31, 2023. Emitters covered during this period will have until November 1, 2024 to surrender to the government the number of emission allowances corresponding to the emissions they reported and verified in 2021, 2022 and 2023.
  
  
• The partner governments are currently developing an accounting methodology that will make it possible to attribute to each its share of reductions achieved jointly by emitters in California and Québec under the linked carbon market. The information can then be combined with that of the Québec greenhouse gas emissions inventory to reflect the progress of the governments toward their respective reduction targets.
  
  
• The cap-and-trade system for greenhouse gas emission allowances (C&T system) is a pivotal measure of the 2030 Plan for a Green Economy (2030 PGE). All proceeds from emission unit auctions are paid into the Electrification and Climate Change Fund (ECCF), which finances the 2030 PGE's measures to reduce GHG emissions and adapt to climate change.
  
  
• Québec has set a goal to reduce its GHG emissions by 37.5% below their 1990 levels by 2030. Québec is also aiming for carbon neutrality by 2050.

Associated links:

• To access the California Air Resources Board's press release on emissions coverage for the 2018-2020 compliance period: https://ww2.arb.ca.gov/news/100-companies-cap-and-trade-program-meet-2020-compliance-obligations.
  
  
• To learn more about the carbon market's compliance periods:
  https://www.environnement.gouv.qc.ca/changements/carbone/Couverture-en.htm
  
  
• For information on the Québec-California carbon market:
  https://www.environnement.gouv.qc.ca/changementsclimatiques/marche-carbone_en.asp                                                                                                                                                

SOURCE Ministère de l'Environnement et de la Lutte contre les changements climatiques