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Frequently Asked Questions

1How does the carbon market work?

As in any market, there is a matching of offer and demand. So, two actors are essential for the functioning of the climate market:

  • Offer: A carbon credit seller, for example, an organization that has reduced its emissions by implementing an energy efficiency project.

  • Demand: A carbon credit buyer, for example, an organization that seeks to compensate for its greenhouse gas emissions.

The objectives of these two organizations are distinct.

  • For the seller, the organization having reduced its emissions: it seeks to obtain a financial gain, to profit from its green investments.

  • For the buyer, the organization compensating for its emissions: it will be able to integrate a green aspect in its communications because it will support an environmental project.

Furthermore, generally speaking, the purpose of the carbon market allows for:

  • Preparation of the company for the energy challenges of the coming years (to become aware of future cost increases.)

  • Anticipation of regulatory obligations

  • Reorientation of strategic company objectives according to the reference table

  • Communication of strategic company objectives with a firm commitment

Both organizations have one element in common: the traded product; that is, the carbon credit.

2What is a commodity?
We use this financial term because it indicates a product, the value of which fluctuates in time according to the quality standard, following market evolution. The commodities are generally transacted in cash and are immediately deliverable or are transacted in the future.
3What is a carbon credit?

The carbon credit is the environmental commodity traded on the carbon market. Carbon credits are created by reduction projects established in a company. Following the installation of the greenhouse gas reduction project, the next step is quantification. This is based on a recognized methodology and consists of comparing the greenhouse gas emissions after the implementation of the project with the base scenario – that is, before the implementation of the project. The number of carbon credits is represented by the difference in greenhouse gas emissions.

The Kyoto protocol identified six gases that are primarily responsible for global warming. Each greenhouse gas was given a conversion factor, also known as global warming index, to represent, in carbon dioxide equivalence, its harmful potential on the atmosphere.

CO2 conversion table

Greenhouse gases accounted for on the carbon market


Carbon dioxide




Nitrous oxides



11 700


131 000

Sulfur hexafluoride

23 900

There are, however, other industrial gases harmful to the environment. For example, sulphur dioxide, gas responsible for acid rain, is controlled outside of the carbon market.

In this way, for each greenhouse gas, we establish the standard:

1 ton of CO2 eq reduction = 1 ton of carbon credit

A carbon credit is therefore a unit corresponding to a CO2 equivalent ton. Several projects allow for the reduction of greenhouse gases and for the trading of carbon credits on the carbon market.

To see a case study on transport, energy efficiency, residual materials or forestry and agriculture.

Here is a list of projects established in different fields.

Note: The categories listed below do not include the afore-mentioned sectors for the simple reason that your activity often integrates several characteristics (such as transport, buildings, residual materials programs…) that could emit greenhouse gases.

To give you an idea of your business’s admissibility to carbon credits, we cite a few examples of established projects:

For transport:

  • The adoption of an eco-conduct practice

  • The replacement of the vehicle fleet by electric or hybrid vehicles or the optimisation mechanical characteristics of heavy vehicles

  • The optimisation of packaging and the eco-conception for a more judicious use of space

  • The choice of other transport modes or network optimisation

For industry:

  • Energy source conversions

  • Oil, propane, or butane reduction

  • Energy efficiency projects

For buildings, emissions are tied to energy consumption. The reduction of CO2 emissions is tied to energy efficiency projects such as:

  • Improvements in heating systems

  • Conversion of fossil fuel energy to electric, biomass, solar, ...

  • Having more energy efficient appliances

  • LEED certified buildings

For residual materials management

  • Having modified sorting systems

  • Integrating an on-site biogas capture and recovery system

  • Installing a bio-methanation, or composting, organic matter treatment program

  • Installing cogeneration energy units

For agriculture :

  • Establishing good cultural practices

  • Using agroforestry practices

  • Improving the efficient use of fertilizers

  • Capturing methane for energy production

  • Stocking carbon in agricultural land

  • Achieving a liquid manure/fertilizer bio-methanation project

These are just a few examples of projects that could allow your company to reduce its greenhouse gas emission.

These initiatives, taken with or without business strategies, provide for a cleaner Quebec of tomorrow. By quantifying your emission reductions, your management validates the pertinence of your green initiative by way of financial results.

Will you be a leader or a follower in this movement?

Please contact us for any additional information regarding your admissibility to the carbon market.

4How does carbon credit accounting work?

For carbon credit accounting, we rely on a reference scenario and recognized protocols.

  • The reference scenario is the practice before the project implementation

  • The protocols are the methodologies used to calculate the project carbon credits. The protocols and methodologies are the formulas and calculations of greenhouse gas reduction parameters.

There are several programs and methodologies. The carbon credit nomenclature can vary depending on the program under which the credits in question were registered.

  • The Verified Emission Reduction (VER) are carbon units generated according to the ISO 14 064-2 standard

  • The Climate Reserve Ton (CRT), a Californian register.

  • • The Verified Carbon Standard (VCS) names carbon credits, Verified Carbon Units(VCU) according to diverse methodologies other than the VCX methodology – for example, the Clean Development Mechanism methodology(CDM) and the Climate Action Reserve(CAR) (except for the Forest and Urban Forest methodology) ( http://v-c-s.org/methodologies/what-methodology ).

  • In Canada, the most frequently used register is the Clean ProjectsTM Registry of the Canadian Standard Association – CSA (le Registre des GES ÉcoProjetsMD de l’Association Canadienne de Normalisation) (http://www.csa.ca/cm/ca/en/home).

The carbon credit vintage and the methodology used for quantification are some of the elements that influence the carbon credit price.

Why do we use the word “vintage”?

Vintage is a term designating the carbon credit production year – that is to say, the year when greenhouse gas reduction took place. Therefore, at the time of the sale, we propose several vintages of different projects and the more recent the carbon credit, the more valuable the credit.

What is the reference scenario?

The reference scenario doesn’t necessarily correspond to a particular reference year because the project could have started in the middle or the end of the year. The reference scenario is determined to be the situation before the implementation of the greenhouse gas reduction project.

What are the carbon credit marketing steps?

For the carbon credits to be sold, the project in question must go through three steps:

  • The project quantification

  • The project validation/verification

  • The recording of the project on a recognized register

To obtain carbon credits that can be sold on the market:,

  • The first step consists of quantifying emissions, that is to say the quantification of the reduction following a protocol or methodology.

  • The second step is third-party validation/verification. The validation before the start of the project can be required under certain protocols. It is a question of validating the starting hypothesis and the calculation methodology. Verification is always obligatory. An inspector certifies that the protocols as well as the data used for calculation and the mathematical rationale are exact.

  • Finally, the third step is the recording of the carbon credits in a recognized register. This recording allows the creation of a unique and traceable serial number. It is this serial number that is sold on the carbon market.

5What is the greenhouse gas cap and trade system (SPEDE)?

The cap and trade system is simple: :

  • The government establishes an emissions cap for all emitters.

  • The concerned companies, called “covered emitters” must submit a greenhouse emissions declaration to the government.

  • The government establishes a greenhouse gas cap and trade ceiling for all “covered emitters”, and the ceiling will be reduced in the coming years.

  • The “covered emitters” must compensate for their greenhouse gas emissions by purchasing emission rights.

6Who are the covered emitters?


Familiarization of participants with the system

Targeted emitters to 1 January, 2013

Approximately 75 operators in industrial sectors and in energy production in which annual greenhouse gas emissions equal or exceed the annual threshold of 25,000 tons of CO2 equivalent per fixed installation.

Targeted emitters to 1 January, 2015

Business operators that distribute to Quebec or import fuel and combustibles with annual greenhouse gas emissions attributable to their combustion attain or exceed the annual threshold of 25,000 tons of CO2 equivalent.