The Carbon Market
Auction Proceeds Allocated to the Electrification and Climate Change Fund
Since December 3, 2013, the Ministère de l’Environnement, de la Lutte contre les changements climatiques, de la Faune et des Parcs (MELCCFP) has held quarterly greenhouse gas emission units auctions. All proceeds from the sales are paid to the Electrification and Climate Change Fund (1) (ECCF) (French).
Emission units from partner governments are entirely fungible, which means that emitters and participants can purchase them irrespective of their country of origin.
In joint auctions, the minimum unit price is the greater of the annual minimum prices of partner governments, after conversion into the same currency. The reference conversion rate at any given auction is the Bank of Canada daily average rate on the first business day preceding the event (2). However, Canadian bidders can pay in either Canadian or US dollars.
As a result of this possibility, a portion of the auction proceeds must be converted from one currency to the other. Any variance in the exchange rate between the day before the auction and the day of conversion may have a significant impact on the amount paid to the Electrification and Climate Change Fund. The following table shows the amount paid to the Green Fund for each listed auction.
Proceeds from the auction of
greenhouse gas emission units
paid to the Electrification and
Climate Change Fund, as of March 15, 2023
(1) Before November 1, 2020, the amounts were paid into the Green Fund.
(2) Before March 1, 2017, the Bank of Canada published a noon exchange rate, in addition to a daily average exchange rate. This noon exchange rate was used for all auctions that took place before that date.
(3) Joint auctions involve currency conversion for part of the proceeds. The rate and transaction fees on the date of conversion can affect the amount deposited to the Electrification and Climate Change Fund. As a result, the product of the number of emission units sold and the settlement price may slightly differ from the actual amount deposited.
(4) The increase in the number of emission units offered for sale in 2015 results from the inclusion of fossil fuel distributors on January 1, 2015.
(5) Joint auction including California, Québec and Ontario.
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