The federal government plans to introduce draft regulations for its national greenhouse gas offset system in the next few weeks.
Originally announced in the 2019 federal budget, the intent is to establish a framework for generating carbon offset credits, which can then be sold to help others meet their greenhouse gas (GHG) emissions targets.
The offset system is part of the Liberal government’s larger climate change strategy that also features a $170/tonne carbon tax, which will result in significant new costs for farmers, both directly and indirectly as others in the agricultural supply chain pass their costs down to the farmgate.
While farmers have voiced widespread concerns about the costs of the federal government’s climate policies, producers and farm groups across Canada have also lobbied for recognition of agricultural practices that reduce greenhouse gas emissions.
The details are not yet known, but Agriculture Minister Marie-Claude Bibeau told Manitoba farmers attending Keystone Agricultural Producers’ online annual general meeting on Tuesday that she sees the planned carbon offset system creating an opportunity for farmers to receive credit — and income — for reducing emissions and sequestering carbon.
“I think there is an opportunity for our farmers to be recognized for all the efforts they are doing to reduce their emissions and to always elevate the level of sustainable agriculture in Canada,” said Bibeau, speaking to reporters after her speech at the KAP meeting.
One of the first offset protocols the government is considering is focused on organic carbon in soils, noted Bibeau.
“It’s still early in the process. It’s very technical and scientific,” she said, when asked for more details.
The federal environment department — Environment and Climate Change Canada (ECCC) — is still working on the draft regulations, and so while Bibeau describes it as an opportunity, it’s not confirmed which — or if any — farming practices could potentially qualify for credits.
An official with ECCC says for any activity to generate a credit, there would have to be “real, additional, quantified, verified, unique, and permanent” greenhouse gas reductions.
“As such, any agriculture-related conservation activities or management practices would need to be above and beyond business-as-usual, including any relevant legal requirements, not be covered by carbon pollution pricing, and would need to follow an approved quantification protocol,” the official writes, in an email obtained by RealAgriculture.
In discussion documents, ECCC has also proposed that projects that receive credits through other GHG reduction programs, including the government’s proposed Clean Fuel Standard, would not be eligible for credits through the federal offset system.
In addition to drafting the regulations, the government is developing protocols on how to quantify and monitor different types of emission reductions that would be eligible for credits.
Coinciding with Bibeau’s comment in the KAP meeting, ECCC has chosen four protocols to be developed in the initial phase, including an “Enhanced Soil Organic Carbon” protocol, which would recognize practices that “reduce emissions and increase soil carbon sequestration on agricultural land.”
The others in the initial protocol development phase pertain to landfill management, refrigeration systems, and forest management. (Other agriculture-related protocols that would have outlined how credits could be generated through manure management and anaerobic digestion were on the short-list, but did not make ECCC’s cut for the initial phase.)
The environment department is currently seeking external technical experts to help develop these protocols on how emissions reductions will be measured and tracked.
“Development of all protocols in the federal GHG offset system will be informed through the input of technical expert teams and learnings from existing quantification methodologies in other offset programs,” says the ECCC official. “Various existing offset programs (for example, at the provincial level and in other countries) have quantified soil organic carbon levels through modelling, direct measurement, or a combination of modelling and direct measurement. A wide variety of models and direct measurement procedures are available for review during protocol development.”
Ultimately, if a farm practice is determined to be eligible for credits, the official says carbon credit trades would be negotiated between the party generating the credits and interested buyers, and would be recorded in ECCC’s tracking system.
“Third parties, such as carbon trade exchanges or brokerage services, may play a role in facilitating transactions and may reduce the transaction costs associated with trading activity,” says the official, noting the federal system “would not determine the price for offset credits, rather this is determined by supply and demand in the market.”