Quebec Cracking Down on Car Manufacturers with New Zero-Emission Standard

Quebec is rolling out a new standard for zero-emission vehicles that looks to crack down on automakers and motivate them to sell carbon-neutral cars—or pay the price.

The province is the first in Canada to create a policy with the intent of fuelling the development and access to rechargeable electric and hybrid vehicle models in Quebec while cutting down on carbon emission in the province. Quebec’s ZEV standard was unveiled in late 2017 will officially come into force on January 11.

The new standard sees automakers earning credits through the sale of zero-emission (ZEV) or low-emission (LEV) vehicles to Quebec residents, with the target amount adjusted based on the size of that particular car manufacturer. The credits will begin to rack up starting with 2018 models. The rules will be applied to larger automakers—those that sell or lease more than 20,000 vehicles in Québec each year—starting in 2020.

For example, an automaker that sells 30,000 vehicles in the province will need to earn 2,850 credits, 1,800 of those that must be ZEV credits. While the calculations range, the sale of one ZEV will earn a manufacturer three credits.

If the annual target isn’t hit, manufacturers have two choices: purchase credits from other automakers that exceeded their set number and have excess credits or be penalized by paying a fee to the province’s Green Fund.

“The current vehicle offering does not meet growing consumer demand,” said Isabelle Melançon, Quebec’s minister of sustainable development, environment and the fight against climate change.

“Many Québécois want to drive clean vehicles but face a dearth of cars on the market and/or discouragingly lengthy waiting times. We need to release these limitations on consumer choice, and that is the intent of the ZEV standard: More supply and more diversity in available models that meet the specific needs of users,” she added.

The province noted that 10 U.S. states have also implemented a similar credit-based system. Vehicles eligible for credits include fully electric car, vehicles equipped with a hydrogen-powered combustion engine, rechargeable hybrid vehicles, and any ZEV. In a statement, the province said it is also extending the cars applicable for credits to those that have been upgraded by carmakers and licensed for the first time in the province.

Clean Energy Canada recently found Canada isn’t as progressive as other Western countries when it comes to adopting electric vehicles. In 2016, electric vehicles made up only 0.6 per cent of total car sales—far lower than the U.S., the U.K., and China. By contrast, Norway leads the way with nearly 29 per cent of the market share.

The Simon Fraser University think tank discovered that despite lower battery prices and the potential for electric cars to meet the needs of an overwhelming majority of Canadians, it remains difficult for interested buyers to get the keys to an emission-free car, waiting several months for certain models. Part of the problem, according to Clean Energy Canada, is the fact there aren’t national policies to motivate buyers and sellers to choose an electric over a gas guzzling alternative.

“The fight against climate change is a planetary challenge where failure is not an option… Ambition and audacity in public policy is required. The ZEV standard is part of these ambitious measures that in combination with other current government measures and progress in the automobile industry over the next few years will help green the Québec vehicle fleet,” said Melançon.

The standard is part of Quebec’s larger goal to shrink its carbon footprint by cutting greenhouse gas emissions to 20 per cent below 1990 levels by 2020, and 37.5 per cent by 2030. But the new zero-emission bill wasn’t well received by associations for car manufactures.

“These regulations create unique requirements and burdens which may result in unintended consequences for consumers, automobile dealers, industry and ultimately, Québec’s economy,” said Mark Nantais, president of the Canadian Vehicle Manufacturers’ Association.

Backing this same sentiment, Global Automakers of Canada said in a release the credit-based system will be “very problematic” for manufacturers, dealers and consumers.

While Canada waits for the federal government to unveil its Zero-Emissions Vehicle Strategy, there are currently no incentives to switch to carbon-neutral cars. However, Ontario, B.C. and Quebec offer provincial rebates to car buyers.