Bill 81, introduced by Québec's Minister of the Environment and the Fight against Climate Change on November 20, 2024, proposes significant amendments to the province's environmental laws. This comprehensive legislation aims to enhance environmental protection, streamline assessment procedures, and strengthen regulatory frameworks across various sectors.
A key aspect of Bill 81 is the proposed change to the eligibility of projects for allocations under the cap-and-trade program for greenhouse gas (GHG) emission reduction. Currently, Quebec's cap-and-trade system primarily focuses on emissions reduction rather than carbon removal. The system covers about 80% of the province's GHG emissions, including fuel combustion emissions in power, buildings, transport, and industrial sectors, as well as industrial process emissions. The bill suggests adding projects for the removal of GHGs from the atmosphere, including capture and sequestration, to the list of projects eligible for free allocations by large emitters subject to the cap-and-trade. This modification to section 46.1.8 of the Environment Quality Act (EQA) represents a significant shift in policy, potentially incentivizing innovative carbon removal technologies and practices. The proposed change would expand the scope of eligible projects, creating new opportunities for large emitters to meet their obligations while potentially accelerating the development of carbon capture and sequestration technologies. By expanding the scope of eligible projects, Québec aims to encourage a broader range of climate change mitigation strategies, potentially accelerating the province's progress towards its emissions reduction targets. Bill 81 is proposed in parallel with the ongoing rulemaking by the Ministère de l'Environnement, de la Lutte contre les changements climatiques, de la Faune et des Parcs (MELCCFP) to assess and potentially adjust the operating parameters of the cap-and-trade program
The inclusion of GHG removal projects in the cap-and-trade allocation system could have far-reaching implications for Québec's climate policy. It has the potential to stimulate investment in carbon capture and sequestration technologies, fostering the development of a new sector within the green economy. This change could also provide more flexibility for large emitters to meet their obligations under the cap-and-trade, potentially reducing compliance costs while still contributing to overall emissions reductions. The specific thresholds, methodologies, and enforcement mechanisms established in these regulations will directly impact the number of eligible projects, the volume of verifiable GHG removals, and ultimately, the policy's effectiveness in contributing to Quebec's emission reduction targets.
Beyond this key change, Bill 81 proposes several other significant amendments. The legislation seeks to revise the environmental impact assessment and review procedure, enhancing public participation and streamlining processes. It introduces information periods at the beginning of assessments and proposes a new procedure for sectoral or regional environmental assessments. These changes aim to improve the efficiency of environmental assessments while ensuring robust public engagement.
The bill also addresses the coexistence of provincial regulations and municipal bylaws relating to the environment. It proposes a shift from the current principle of provincial precedence to a new general principle of regulatory coexistence, potentially empowering municipalities to take a more active role in environmental protection.
Notably, Bill 81 introduces a zero-emission standard for heavy motor vehicles, aiming to encourage manufacturers to increase the supply of electric heavy vehicles in Québec. This aligns with broader efforts to reduce emissions in the transportation sector.
From a policy perspective, Bill 81 represents a significant evolution in Québec's approach to environmental governance. By expanding the cap-and-trade to include GHG removal projects and implementing a range of other measures, the province is taking a more comprehensive approach to achieving its emission reduction target of 37.5% below 1990 levels by 2030. The success of these reforms will depend on their implementation, the adaptability of affected industries, and the province's ability to balance environmental protection with economic growth. As the bill progresses through the legislative process, it will be crucial to monitor any amendments and assess their potential impacts on businesses, municipalities, and environmental outcomes in Québec. While specific timelines for the bill's passage are not currently available, it is important to note that the legislative process in Québec typically involves multiple stages of review and debate before a bill can become law. The next step will involve special consultations in the Québec National Assembly.