The Carbon Market

Opt-in

An emitter may request that an establishment it operates and which is not subject to the Regulation respecting a cap-and-trade system for greenhouse gas emission allowances (C&T Regulation) become subject to it if all of the following eligibility conditions are met:

• The establishment’s sector of activity is listed in Appendix A of the C&T Regulation;
• The emitter reports for the establishment in accordance with the Regulation respecting mandatory reporting of certain emissions of contaminants into the atmosphere (chapter Q-2, r. 15) (Mandatory Reporting Regulation), annual GHG emissions in an amount lower than 25,000 metric tons of CO₂ equivalent, excluding emissions referred to in the second paragraph of Section 6.6 of the Mandatory Reporting Regulation;
• The emitter reports for the establishment in accordance with paragraph 1 of Section 6.1 of the Mandatory Reporting Regulation annual greenhouse gas emissions equal to or greater than 10,000 metric tons of CO₂ equivalent.

If the emitter doesn’t report emission in accordance with the Mandatory Reporting Regulation expects to report for the establishment GHG emissions in an amount lower than 25,000 metric tons of CO₂ equivalent, excluding emissions referred to in the second paragraph of Section 6.6 of the Mandatory Reporting Regulation, it must be able to demonstrate that its emissions will reach or exceed 10,000 metric tons of CO₂.

To opt-in, the emitter must fill out the Application Form to Opt-in (PDF, 1.2 MB) and send it no later than May 1^st of the year prior to the year the emitter wishes to begin being required to cover the emissions of the establishment in question.

Registration

All emitters must open accounts in the CITSS system in order to fulfill their mandatory compliance under the C&T Regulation.

Emitters who are already registered simply need to add the establishment directly in the CITSS system.

Start of coverage obligation

The emitter will be required to cover the establishment’s emissions starting on January 1 following its application to opt-in, providing the emitter’s registration in the CITSS system is made at the latest by September 1^st of the year in which it applies to be subject to the Cap-and-Trade System.

If the registration is made after September 1^st of a given year, the emitter will be required to cover the establishment’s emissions starting on January 1^st of the second year following the year of registration in the CITSS system.

Allocation of emission units without charge

If the establishment operates in a sector of activity listed in Table A of part I of Appendix C of the C&T Regulation, the emitter is eligible to receive emission units without charge throughout the entire period during which the establishment is subject to the Cap-and-Trade System.

End of coverage obligation

The following three situations can lead to the termination of the opt-in period:

1. The emitter requests that the establishment no longer be subject to the Cap-and-Trade System. The emitter is then required to cover its emissions up to December 31 of the last year of the compliance period underway, provided that the emitter files the request no later than September 1^st of that same year;
2. The establishment’s emissions are equal to or exceed 25,000 metric tons of CO₂ equivalent. The emitter is then required to cover its emissions up to December 31 of the year preceding the one in which its emissions reached or exceeded the emission threshold. After that date, the establishment will be considered to be compulsorily subject to the Cap-and-Trade System and the emitter will need to comply with the regulatory terms and conditions applicable to such an establishment;
3. The establishment’s emissions are under the reporting threshold as per Section 6.1 of the Mandatory Reporting Regulation, i.e., 10,000 metric tons of CO₂ equivalent over three consecutive years. The emitter is then required to cover its emissions up to December 31 following the third consecutive emissions report for which the establishment’s emissions are under the reporting threshold, unless a request to remain covered for five extra years has been submitted, no later than September 1^st of establishment’s last year of coverage.