Blue Bulletin
Majors Industries
December 2025
Changes in CATS prices
November 2025 Auction Results
The last “regular” auction was held on November 19, 2025 with results released on November 26, 2025.
The final price for current- vintage units was US$28.32 (C$39.64), which is US$2.45 above the 2025 floor price of US$25.87. Future- vintages units cleared at US$29.61 (C$41.45). All current and future vintage units were fully subscribed.
For comparison, the clearing price for current- vintage decreased slightly from the August 2025 auction, where the final price was US$28.76 (C$39.84).
Detailed auction results are available on the website of the Ministère de l’Environnement, de la Lutte contre les changements climatiques, de la Faune et des Parcs (MELCCFP).
CATS price trends in the secondary market
Following the August 2025 auction, the secondary market unit for emission units experienced a strong recovery. Prices rose from US$28.66 at the end of August to US$32.45 in mid-October-an increase of 13.2% within a few weeks. This trend is largely attributed to regulatory amendments adopted in California, which extend the program to 2045 under Cap-and- Invest framework, thereby strengthening its long-term stability. The upward momentum was also supported by expectations surrounding the first California Air Resources Board (CARB) regulatory workshop, scheduled for late October aimed at implementing these amendments.
At the workshop, CARB presented a trajectory indicating a 118-Mt reduction in emission units sold by the State for 2027-2030, in order to maintain progress toward the target of a -40% reduction in GHG emissions by 2030. The immediate market reaction was moderate: the spot price initially gained US$0.38 before closing down by -0.62%, reflecting limited enthusiasm amid ongoing uncertainties. Despite these developments, several challenges remain, and past delays have raised concerns about CARB’s ability to meet its proposed implementation schedule.
For example, secondary market activity remained limited in November, as participants awaited the final government auction of 2025. Following the results-where all units offered were sold-the secondary market price settled at US$29.50 the following Friday. After the release, the market experienced a brief downturn before stabilizing. This reaction may be linked to the proposed 40% reduction , which is less restrictive than the earlier scenarios and therefore eased immediate pressure related to compliance obligations.
As of December 1, 2025, the price of an emission allowance stood at US$29.18, which is US$3.31 below the current floor price.
Assessment of CATS operating parameters: Status report
Following the adoption of the amendments in September 2025, a first workshop was held on October 29, during which CARB presented several key elements regarding their implementation. The governmental agency is proposing to withdraw 118 million units between 2027 and 2030 to maintain – progress toward a roughly 40% reduction in GHG emissions by 2030, confirming that the more ambitious “Option 1” scenario (-48%) will be abandoned in favour of a more realistic compromise. Over the long term, the program would target a final cap of 30.3 million units by 2045.
The new developments include the introduction of an updated offset credit rule, under which each offset credit used must be matched by the removal of an equivalent emission unit in the following year. In addition, free allowances for industrial sectors would remain at high levels despite the declining cap, in order to preserve affordability and limit the economic impacts.
Uncertainties remain, particularly regarding the connection with the State of Washington (2027-2028) and how the new rules would be integrated. The timetable anticipates the publication of the official Initial Statement of Reasons (ISOR) by the end of 2025, which will mark the formal start of the regulatory process, following a vote by April 2026 and an entry into force in September 2026 for the 2027 vintage allowances.
In Quebec, the government is proposing to withdraw 17 million emission allowances from future issuances and to reduce the offset credit cap. These adjustments aim to strengthen the efficiency of the Quebec system in achieving its 2030 GHG reduction targets and its 2050 carbon- neutrality objective. According to the government’s official website, publication of the proposed regulations is expected in winter 2026, with adoption planned for spring or summer 2026.
CATS must be monitored closely in the context of the upcoming provincial election campaign in 2026 and the ungoing consultations on updates to the climate targets, which run until December 3. These consultations, led by the Commission des transports et de l’environnement, aim to review the current 2030 target of -37.5% relative to 1990 levels –a goal considered difficult to achieve given that reductions to date stand at approximately 19%. Discussions are focusing on more ambitious scenarios, including intermediate milestones for 2035 and 2040 as well as carbon neutrality by 2045, while evaluating the economic and social impacts to ensure a just transition. The Government is seeking an “ambitious but realistic” target that balances climate objectives with economic and employment considerations, a decision that could influence the future trajectory of CATS and the demand for emission credits.
2026 Auctions
The Government of Québec has released information on 2026 government auctions, including the new floor price and the four scheduled auction dates.
For 2026, the minimum auction price has been set at US$27.94. The first auction of the year is scheduled for February 18, 2026.