The draft regulation under the Environment Quality Act (chapter Q-2) proposes an amendment to the regulation respecting the cap-and-trade system for greenhouse gas emission allowances, with the objective of refining the treatment of emissions within the system. The amendment specifically seeks to exclude carbon dioxide (CO2) emissions attributable to the combustion or use of biomethane from the definition of “verified emissions.” This change ensures that such emissions are not counted in the overall cap-and-trade accounting system, recognizing biomethane as a renewable fuel with distinct environmental implications compared to conventional fossil fuels.

The rationale behind the amendment aligns with parallel changes proposed in the Regulation respecting mandatory reporting of certain emissions of contaminants into the atmosphere, which was published in the Gazette officielle du Québec on the same date. Both measures are coordinated to ensure regulatory consistency and to support Québec’s broader climate policies. By excluding CO2 emissions from biomethane in verified emissions calculations, the regulation creates a more favorable framework for renewable natural gas use, encouraging investment and transition away from fossil fuels while reinforcing the province’s cap-and-trade system as a central mechanism for reducing greenhouse gas emissions.

The study accompanying the draft regulation indicated that the amendment will have no direct impact on enterprises, including small and medium-sized businesses. This assessment reflects the fact that the measure primarily affects accounting definitions within the cap-and-trade framework rather than imposing new compliance costs or operational requirements. Instead, it clarifies the status of biomethane emissions and ensures that regulated entities are not penalized under the cap-and-trade program for using this cleaner alternative energy source.

The draft regulation provides specific technical amendments. In section 2 of the regulation, a clarification will be added to exclude CO2 emissions attributable to biomethane combustion or use from subparagraph 3 of the second paragraph. Similarly, in section 3, the same exclusion will be applied to paragraph 7. These precise insertions ensure that the regulatory text explicitly reflects the policy change.

Ultimately, the draft regulation reflects Québec’s effort to refine its climate strategy by aligning technical rules with broader policy objectives. Excluding biomethane-related CO2 emissions from verified emissions represents a targeted yet meaningful adjustment that strengthens the incentives for renewable energy use and supports the province’s ongoing commitment to reducing greenhouse gas emissions through its cap-and-trade system. The regulation is modest in scope but significant in reinforcing Québec’s leadership in developing pragmatic, environmentally sound policies within its emissions trading framework.

Quebec (Draft) September 16, 2025
Disclaimer: Insights are for informational purposes only and do not reflect RRI’s official position or constitute legal opinion.