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Zero-emission vehicles (ZEV) standard

The Act to increase the number of zero-emission motor vehicles in Québec in order to reduce greenhouse gas and other pollutant emissions was adopted on October 26, 2016.

As a result, like 10 U.S. states, including California and several northeastern states, Québec has invested itself with the power to adopt a regulation commonly called the “ZEV standard,” which encourages automakers to improve their ZEV offer.

Following the adoption of the Act, two draft regulations were published in the Gazette officielle du Québec on July 5, 2017. The first details the requirements of the future ZEV standard, while the second, issued under the power granted to the Minister by the Act, determines the number of credits that can be used by individual motor vehicle manufacturers and defines the confidential nature of some types of information.

These draft regulations were the subject of a 45-day public consultation that ended on August 19, 2017. Comments received are currently being reviewed. The goal is for manufacturers to report their vehicle sales as soon as the regulations come into effect, with mandatory reporting beginning with model year 2018.

The ZEV standard is part of a set of initiatives, primarily in conjunction with the 2013-2020 Climate Change Action Plan (2013-2020 CCAP) and the 2015-2020 Transportation Electrification Action Plan (TEAP) which sets a target of 100,000 registered plug-in vehicles by 2020. 

The ZEV standard: overview

Regulation


Objective

Incentivize the ZEV offer so that Québec consumers have access to a greater number and variety of plug-in vehicles that are the cleanest and most technically advanced on the market.

Targeted businesses

Automakers that sell or lease a yearly average of more than 4,500 new vehicles (all light models combined) will be subject to the ZEV standard.

Note: Car dealerships are not subject to the Act or the future ZEV standard. The ZEV standard will enable dealerships to offer consumers what they are asking for, i.e., more low-carbon models at increasingly affordable prices. To meet their targets, automakers will need to ensure that the ZEVs are attractive and available where the demand exists.

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Procedure

Starting with 2018 models, automakers will be required to meet a ZEV sales target that is set by the government and transposed into credits. The target will be calculated by applying a percentage to the total number of light vehicles each manufacturer sells in Québec. The credit requirement will therefore vary from one manufacturer to another. Every sale or lease of a ZEV recognized by the Minister will earn the manufacturer a number of credits based on the vehicle’s electric range. The greater the range, the greater the number of credits earned by the manufacturer, which in turn will reduce the number of ZEV sales the manufacturer will need to reach its target. The goal of the ZEV standard is to incentivize automobile manufacturers to build more models and use increasingly efficient low-carbon technology.

Small manufacturers not subject to the standard, as well as high-performance automakers, will also be able to benefit financially from selling their excess credits to other manufacturers. Those manufacturers will have the option of purchasing credits to avoid paying the regulatory charges set out in the regulation or hold the credits for their future needs. The requirements will take effect with 2018 model year vehicles.

Furthermore, automakers will be able to accumulate credits for 2014, 2015, 2016 and 2017 model-year vehicles, without regulatory requirements, and use those credits for compliance purposes in subsequent years. However, it should be noted that the government has invested itself with the power to regulate the use of deferred credits in order to ensure that its objectives are achieved.

All operational parameters, including the credit percentages required by category of automaker, formulas for calculating credits associated with each type of vehicle, requirements for re-conditioned vehicles, rules for using credits as well as the information required when reporting are specified in the draft regulations.

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Types of vehicles eligible for credits

Light passenger vehicles that are allowed on public roads, excluding motorcycles and electric bikes.

  • Fully electric vehicles, including hydrogen fuel cell vehicles;
  • Vehicles equipped with a hydrogen combustion engine;
  • Rechargeable hybrid vehicles;
  • Any other vehicle powered exclusively by another mode of propulsion that emits no pollutants or is powered in combination with such a mode of propulsion.

This includes new vehicles and, under certain conditions, vehicles re-conditioned by their automaker and registered in Québec for the first time.

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Draft ZEV regulations consultation: July 5–August 19, 2017:

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Adoption of Draft Bill 104 on October 26, 2016: