Blue Bulletin
Majors Industries
June 2025
February 2025 auction results
The last auction of the year was held on May 21.
Emission units of the current vintage were sold at the floor price of US$25.87 (C$41.54). For reference, the selling price for this vintage was US$29.27 (C$41.54) during the February 2025 auction. Emission units of future vintages were sold at US$28.00 (C$39.74).
The detailed auction results are available on the website of Quebec’s Ministère de l’Environnement.
Changes in CATS prices over the past three months
After a modest rise in prices between mid-April and mid-May 2025, the price of emission permits units is again hovering near the floor price on the secondary market. As of June 3, 2025, the price of an emission permit unit is US$25.98, or $11 less than the current floor price.
Current price levels reflect the political, economic and regulatory uncertainty surrounding carbon markets in both Canada and the United States. There is increased caution, particularly in the secondary market of the Western Climate Initiative (WCI), a joint venture between California and Quebec. This caution is due to the continuing delay in proposed amendments, which were initially expected in the fall of 2024 but have yet to materialize. This is compounded by the macroeconomic uncertainty related to the tariffs imposed by the Trump administration and the desire to put climate policies on decarbonization on the back burner, particularly in the United States. On April 8, President Trump signed three executive orders related to national energy security.
One of these executive orders aimed to implement any legal actions deemed relevant to eliminate state regulations, deemed undue, preventing free energy production in those states and consumption by Americans. That order, which explicitly quoted California’s CATS, had a bear effect on a number of carbon markets in the United States, including in California.
In response to these executive orders, on April 15, 2025, the governor of California reiterated in a press release his support for completing the extension of California’s CATS during the current legislative session. A week earlier, the National Assembly also affirmed its unanimous support for Quebec’s CATS.
Since then, in Quebec, following a Leger survey, there has been a political debate about Quebecers’ adherence to this pricing and its effectiveness. Despite the many proponents of Quebec’s CATS, this debate adds uncertainty to an already very volatile market.
Assessment of CATS operating parameters: Consultations ongoing in California
The California governor’s support for extending the CATS could speed up the formal regulatory process for the proposed CATS regulation in that state. According to some forecasters, prices and interest in the secondary market should pick up once regulatory changes in California and Quebec are published. These changes, previously expected in early 2025, would be postponed to an undefined date in 2025 for California, whereas Quebec has so far indicated spring 2025 as the deadline. However, the current environment may lead the governments to revise their timetables.
The adoption of the expected regulatory changes will lead to a stricter reduction target and trajectory and thus a tighter balance between emission permit units supply and demand over the long term. According to the latest market notices published in October 2024, the Government of California plans to withdraw at least 180 million emission units available between 2026 and 2030. The Government of Quebec is suggesting the removal of 17 million emission units from its future issue. The province also noted the gradual reduction in the maximum percentage of offset credits available for future compliance.
August 2025 auction
The third auction of 2025 is planned for August 2025.