Liberals unveil carbon offset regulations, but details on how farms could generate credits still to be developed


The federal government has unveiled the draft regulations for its Greenhouse Gas Offset Credit System, which is designed to facilitate the generation and trade of credits for projects and practices that reduce greenhouse gas emissions.

“The development of the Federal Greenhouse Gas Offset System will mean farmers can be recognized and rewarded for reducing greenhouse-gas emissions on their farms by implementing practices that improve the carbon sequestered in their soil,” notes Agriculture Minister Marie-Claude Bibeau, in a statement.

While the regulations are published in the March 6 edition of Canada Gazette, they mainly cover the over-arching requirements under the system — the actual details on how farms will earn and get paid for these offsets is still to be determined.

As we’ve previously covered, Environment and Climate Change Canada (ECCC) is developing four initial offset protocols for generating and measuring reductions in emissions, one of which is focused on soil carbon in agricultural land. The others pertain to landfill management, refrigeration systems, and forest management.

“The proposed Enhanced Soil Organic Carbon protocol aligns with increased interest in potential climate benefits from the adoption of regenerative agriculture land-management practices that go above and beyond business as usual,” says a briefing document published March 5. “Farmers who reduce or remove GHG emissions through regenerative agriculture practices carried out in accordance with the protocol may be able to generate offset credits which can then be sold, providing a financial incentive.”

The department is in the process of establishing a technical expert panel to provide input into the soil organic carbon protocol. ECCC says there will also be an opportunity for members of the public to comment on draft protocols as part of the development process.

ECCC says it plans to develop the initial four protocols over the summer, and have them ready to implement in the fall of 2021 when it expects to introduce and implement the final regulations.

While the initial focus for agriculture is on soil carbon, ECCC says it’s also considering developing a protocol for emissions reductions through livestock feed management. Beyond that, protocols for “Avoided Conversion of Grasslands, Reduced Nitrogen Oxide Emissions from Agriculture Fertilizer and Livestock Manure Management may also be considered.”

The draft regulation proposes January 1, 2017 as the start-date for eligibility, coinciding with when the Trudeau government announced its “Pan-Canadian approach to pricing carbon pollution.” Any project or practice started prior to that date would not qualify.

The government has emphasized that it will only issue offset credits for projects or practices that go beyond what would have occurred otherwise, which appears to rule out the potential for significant credits for the increased carbon sequestration from zero-till practices adopted in the past. ECCC says eligible projects must create “real, additional, quantified, verified, unique, and permanent reductions and removals of greenhouse gas emissions.”

For biological sequestration projects, the briefing documents say there will be a monitoring and reporting requirement for 100 years after credits have been issued to ensure reductions are permanent.

Projects that are already receiving credits from provincial protocols or other carbon pricing mechanisms, such as the Clean Fuel Standard, would also not be eligible.

The regulations are now subject to a 60-day comment period, through May 5, 2021.

Related: Details on Liberals’ planned carbon offset system expected soon

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