Quebec weighs more stringent offset protocol

Market: Emissions
28/08/23

The Canadian province of Quebec has moved to restrict the types of projects that qualify under one of the offset protocols for its greenhouse gas (GHG) cap-and-trade program.

The province last week proposed allowing only projects that destroy halocarbons in foams to generate compliance offset credits while projects that destroy halocarbons used as refrigerants will no longer be eligible. The province's environment ministry said that it no longer considered such refrigerant projects to be "additional," meaning that they might have happened anyways absent carbon offset financing.

The draft regulation also would ease requirements so that verifiers would only have to visit project sites every three years, a change the province says "will reduce project costs while maintaining the same level of diligence and environmental integrity."

A comment period is open through 6 October. Regulatory text indicates that the updates could take effect at the start of next year.

Halocarbons, often used as refrigerants or in foam blowing agents, include chemicals like hydrofluorocarbons (HFCs) that have significantly more global warming potential than CO2. More than 150 countries, including Canada and the US, are signatories to the Kigali Amendment to the Montreal Protocol, which requires a sharp HFC phasedown.

Quebec has issued nearly 1.5mn offset credits as of 12 July, and 47pc of those credits have come from halocarbon destruction projects.

Because Quebec's carbon market is linked with California's similar program, allowances and offsets are fungible across jurisdictions. California has issued significantly more offsets to date and has generally been a net exporter of allowances and offsets to Quebec sources.

California and Quebec have separately signaled this year that they are considering updating rules in their respective programs, with Quebec saying it will consider the role of offsets in future years. Regulated entities in Quebec can currently use offsets to meet 8pc of their compliance obligations, while California sources can use offsets for 4pc of their obligations through 2025 and 6pc starting in 2026.

The use of carbon offsets in compliance systems remains controversial, given concerns among some environmentalists about whether offset projects reduce as much GHG emissions as they claim. New York state is currently developing its own economy-wide carbon market, which could rival California's in size, but state regulators there have indicated that the new program will not allow offsets.

By Cole Martin

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30/04/25

Brazil's Biomas advances forest restoration project

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29/04/25

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29/04/25

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29/04/25

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29/04/25

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29/04/25

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