Canada's French-speaking province of Quebec has decided to introduce a cap-and-trade system to curb greenhouse gas emissions despite that the withdrawal of the federal government from the Kyoto Protocol.

Pierre Arcand, environment minister of Quebec, announced on Thursday that as a first step, 75 most energy-intensive companies, which annually produce more than 25,000 tons of greenhouse gases, will have the new regime imposed on them as of Jan. 1, 2013.

"We just want to reduce greenhouse gases in the most flexible and efficient way," said Arcand.

The companies, mostly aluminum smelters, mines, cement factories and power stations, will initially be urged to emit less than 25,000 tons of greenhouse gases each year, or to buy carbon offset credits from other companies or trade among themselves.

Arcand said the government is setting the initial price for a ton of carbon emissions at 10 Canadian dollars.

The provincial government hopes that by 2020 its greenhouse gas emissions will drop 20 percent compared to 1990, he said, adding Quebec's program will expand in 2015 to other industries that transport and distribute fuel.

Quebec is the first province to implement this measure in Canada, but Arcand said he expects British Columbia and Ontario to follow suit.

Across North America, California is the only other jurisdiction that has a carbon-trading program.

Quebec's decision was welcomed by environmental groups, but business leaders are worried to be exposed to a competitive disadvantage to their counterparts across Canada or in the United States.

Canada's Environment Minister Peter Kent announced in the Parliament on Monday that Canada is formally withdrawing from the Kyoto Protocol, blaming the accord for leaving out some of the world's largest emitters.

Kent said the decision to do so will save the Canadian government an estimated 14 billion Canadian dollars in penalties for failing to meet the targets set by Kyoto, adding that the Conservative government has no choice given the economic situation.

Canada's withdrawal comes a day after 194 nations, including Canada, agreed in Durban, South Africa, to engage in talks for a new international climate deal, which would come into effect no later than 2020.

The Kyoto Protocol, which expires next year, committed major industrial economies to reducing their annual CO2 emissions to below 1990 levels, while providing financial support to developing nations to encourage them to follow suit eventually.

Canada ratified the accord in 1997 but has since not been able to meet its legally binding targets.

The Conservatives have committed to 17 percent cuts from 2005 levels by 2020, a much lower threshold to meet than cutting below 1990 emissions levels as set by the Kyoto Protocol.

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