Reducing big business GHG

To encourage large businesses to reduce their greenhouse gas (GHG) emissions, Québec has established a GHG emission cap-and-trade system (C&T system), also called the carbon market This hyperlink will open in a new window.. The system sets a price on carbon, i.e., a price on the pollution emitted, thereby obliging large businesses to reduce their GHG emissions or pay for the pollution engendered.

To understand the C&T system, it should be noted that it comprises three key characteristics:

1. Capping GHG emissions
Each year, the government sets the emission caps, i.e., the maximum amounts of GHG that the entire array of emitters regulated by the C&T system can release into the atmosphere. The emitters must submit to the government an “emission allowance” for each ton of GHG released into the atmosphere.

The maximum amount of GHG that can be emitted is declining gradually over time. The reduction in emission caps is leading to an increase in the prices of each tonne of GHG, thereby encouraging businesses to reduce their consumption of hydrocarbons.

2. Buying and selling emission rights
Businesses can avail themselves of several options to cover their GHG emissions, subject to the rules of the carbon market:

  • Businesses exposed to domestic and international competition receive GHG emissions units without charge. Those that reduce their GHG emissions below the number of emission units allocated without charge can sell the surplus units on the market to other businesses that participate in the carbon market. The level of free allocation declines over time to encourage businesses to reduce their emissions.
  • Businesses can also purchase emission units at government auctions, which occur four times a year.
  • What is more, they can also purchase emission allowances on the market from another participating business.

It should be noted that the C&T system also covers GHG emissions from consumption of fossil fuels in the transportation and building heating sectors. This means that the price of fuel paid at the pump is also destined to increase for individuals. The mechanisms of the carbon market thus encourage people to modify their habits so that they, too, reduce their consumption of fossil fuel.

3. The reinvestment of revenues to combat climate change in Québec
The C&T system is a significant source of revenue for Québec. It has collected more than $6 billion since the carbon market was launched in 2013. Québec is funding part of its climate action with the revenue. Accordingly, the carbon market has made possible several measures stemming from the fight against climate change, such as the 2030 Plan for a Green Economy.

Learn more about the operation of the carbon market This hyperlink will open in a new window..

Measures other than the carbon market have been implemented to help businesses reduce their GHG emissions through a Québec industrial sector decarbonization measure This hyperlink will open in a new window. and energy efficiency programs such as Écoperformance This hyperlink will open in a new window..

Examples of the achievements of big businesses

Several large businesses have reduced their GHG emissions. Moreover, the government has funded projects to combat climate change. Below are some examples.

Manufacturing spirits with clean energy

Diageo is converting its spirit manufacturing plant to electricity. The project will eliminate the consumption of roughly 21,000,000 m3 of natural gas and 1 500 l of fuel oil, equivalent to an annual reduction of nearly 40,000 tonnes of GHG emissions in Québec.

Manufacturing greener steel

Arcelor Mittal is implementing a flotation system that significantly reduces the silica in the iron ore concentrate used to produce high-quality iron pellets. The project will enable the company to reduce its GHG emissions in Québec by 200,000 tonnes of carbon dioxide equivalent per year starting in 2026, equivalent to withdrawing more than 57,600 vehicles from roads.

Manufacturing aluminum without producing GHG emissions

ELYSIS is developing a technology to produce aluminum without GHG emissions. This joint venture, established by Alcoa and Rio Tinto in partnership with the Québec government, is putting the finishing touches on this revolutionary technology. The Alma plant will host the first industrial-scale demonstration installation of ELYSIS™ technology.

Using green energy to produce aluminum

Alouette Aluminerie is converting its plant’s anode furnaces to eliminate fuel oil and replace it with liquefied natural gas. It is also establishing a liquefied natural gas service to supply natural gas on the North Shore of the St. Lawrence River. The project will significantly reduce the company’s GHG emissions by nearly 15,000 tonnes per year.

Relying on wind energy in mining

Glencore’s Raglan Mine in Northern Québec is abandoning diesel fuel, replacing it with wind energy, making it the first mining company in Canada to take this step. The project will help reduce GHG emissions from the mine and transform energy production in the Arctic.

Last update: May 19, 2023


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