June 7 (Bloomberg) -- Quebec will become the first Canadian province to impose a carbon tax on energy producers, raising C$200 million ($189 million) a year for measures that will reduce greenhouse gas emissions.

The provincial cabinet approved the tax in Quebec City yesterday, according to a statement on the Natural Resources Ministry Web site. Refiners including the Calgary-based affiliate of Exxon Mobil Corp. and Royal Dutch Shell Plc's Canadian unit will start paying a tax of 0.8 cent a liter on gasoline and 0.9 cent on diesel on Oct. 1. Power producers and gas companies will also be taxed.

``Everyone is talking about the environment; everyone wants to play their part,'' Natural Resources Minister Claude Bechard told reporters in Quebec City yesterday. ``Well, the oil companies too have to play their part.''

While Canada ratified the Kyoto Protocol, the international treaty to cut greenhouse gas emissions that went into effect in 2005, it is falling short of the promised reductions. It would be unrealistic to expect Canada to meet its Kyoto targets, according to the government of Prime Minister Stephen Harper.

Canadian Environment Minister John Baird has said Canada would fall into an economic recession if it tried to reach the Kyoto goal now. Canadian businesses compete with rivals in the U.S., which has not ratified the Kyoto treaty.

`Green Fund'

Quebec Premier Jean Charest first announced plans for the tax a year ago to help finance programs to cut emissions of carbon dioxide and other gases that contribute to climate change.

The province will direct proceeds from the tax to a ``green fund'' that will invest in commuter rail networks and other forms of mass transit. Quebec is Canada's second most populous province after Ontario.

Bechard said he expects that the companies will absorb the higher costs, though he ``can't guarantee'' that producers and refiners won't pass them on to consumers. ``I don't think that we will put any pressure on the gas price,'' he said.

Gasoline producers will contribute about C$69 million of the C$200 million total, Bechard said. Diesel and heating oil producers will contribute C$80 million. About C$43 million will come from electricity and natural gas firms, and C$7 million from coal and propane.

Canada ratified the Kyoto Protocol on climate change in December 2002, agreeing to reduce emissions to 6 percent below 1990 levels from 2008-2012. Canada's greenhouse gas emissions in 2005 were 33 percent above its Kyoto target, government figures released last month show.

Baird, the environment minister, said he is still committed to the treaty's goals. He presented a plan in April to cut greenhouse-gas emissions 20 percent by 2020 and establish mandatory targets for all industries.

To contact the reporter on this story: Frederic Tomesco in Montreal at tomesco@bloomberg.net.

Last Updated: June 7, 2007 11:49 EDT