Awareness of Alberta’s carbon trading system is increasing, says an official with one of the companies facilitating such deals.
Bill Dorgan is president of Agri-Trend Aggregation Inc. (ATAI), a member of the Red Deer-based Agri-Trend Group of Companies.
Last May, ATAI issued its first set of cheques to farmers who had accumulated carbon offset credits through environmentally responsible practices and sold those credits to heavy carbon emitters.
The company is now in the process of making its third set of payments.
“The last year, we’ve come a long way in exposing both producers and emitters and the general public to the value and the good of this Alberta offset system,” said Dorgan, who works out of Airdrie.
Under Alberta’s Climate Change and Emissions Management Act, which was passed in July 2007, “large final emitters” that release more than 100,000 tonnes of carbon-equivalent greenhouse gases annually are required to reduce their emissions by at least 12 per cent, effective last March.
Thereafter, their emissions must decline by a further two per cent a year.
Companies unable to meet these limits are required to pay $15 per tonne over their compliance target into a greenhouse gas technology fund.
Alternatively, they can buy carbon offset credits from entities that have reduced greenhouse gas emissions elsewhere in the province.
For instance, farmers can earn credits by adopting reduced- or zero-tillage farming practices that promote the sequestration of carbon in the soil.
Aggregators like ATAI verify the validity of these credits, combine them with others, and arrange for their sale to large final emitters.
“We as aggregators not only have to spend a bunch of time with producers, but with the large final emitters,” said Dorgan of the trading process.
But, he added, participants on both sides are becoming increasingly receptive to the concept of trading.
“It has become an annuity for some growers,” he said, adding that more are coming on board when they see their neighbours cashing in on the trading opportunity.
Payments to farmers have ranged from about $2,000 to $80,000, said Dorgan
Meanwhile, large final emitters that he has dealt with have indicated an interest in participating on an ongoing basis.
Dorgan said there are just over 100 large final emitters in Alberta, with approximately half of these involved in electricity generation and about 20 per cent connected to the oilsands in Northern Alberta.
Opportunities for farmers are growing, said Dorgan.
He explained that the ways in which they can earn carbon offset credits are increasing as the province recognizes new greenhouse gas reduction “protocols.”
In the case of agriculture, Dorgan anticipates that new protocols related to forage crops, shelterbelts and livestock management, among others, will become increasingly important.
He also believes that carbon offset trading will eventually move to a formal commodity exchange. And Alberta’s system could expand.
“Other provinces are looking at this system with actually pretty great anticipation and several of them — not the least of which is Saskatchewan — have said that they’re very interested in what we’ve got going here.”