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Blog > What Are The Québec Cap and Trade System for Greenhouse Gas Emissions Allowances (SPEDE)?

At Mazout &Propane Beauchemin, we are well aware of the standards and policies in effect in the field of environmental preservation. In this article, we will talk about the main features of the Québec cap and trade system for Greenhouse Gas Emissions Allowances (SPEDE), an initiative aimed essentially at fighting climate change.

What is a SPEDE?

A SPEDE is an economic tool designed in 2013 by the Western Climate Initiative (WCI), an organization of which Quebec has been a member since 2008. A SPEDE has the distinction of being different from the norms and regulations usually used by companies to achieve Environmental goals. Broadly speaking, this flexible market mechanism is used to calculate a carbon cost when making business decisions. A properly managed SPEDE facilitates (at low cost) reductions in greenhouse gas (GHG) emissions, while promoting the use of cleaner technologies. Since the adoption of a SPEDE (also known as the "carbon market") in Quebec, certain categories of companies are now required to consider the cost of GHGs in their decision-making processes. These include:

  • The industrial sector;
  • The electricity sector;
  • Fuel dispensers;
  • Distributors of fossil fuels.

What is the equivalent of an emission right?

An emission allowance is about one metric tonne of CO2. These fees, which are booked in a computer system, are exclusively distributed by the government, using various methods: free of charge, through OTC transactions, auctions or credits (compensatory or early reductions).

SPEDE, a sensible incentive to better respect the planet

In order for a company to be deemed to be in compliance with Québec SPEDE, it must hold a number of emission rights in its account equal to the total of its actual emissions. In this way, SPEDE specifically encourages companies to apply more environmentally friendly processes, for example:

  • Improve energy efficiency; 
  • Use renewable forms of energy; 
  • Use processes that emit low amounts of carbon.

The annual cap

When SPEDE was implemented in Quebec, the government set an annual cap on the amount of carbon emission units it would circulate. Secondly, to encourage better environmental choices by targeted companies - and to achieve more rapidly its environmental objectives - it has gradually reduced this number from one year to the next. For full details on Quebec's SPEDE, visit the Ministry of Sustainable Development, the Environment and the fight against climate Change’s website.

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