Carbon Offsets for Agricultural Practices - Frequently Asked Questions

 
 
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  1. What is an offset credit?
    An offset credit is a reduction in greenhouse gases in one area that offsets the emissions created in another. One offset credit equals 1 tonne of greenhouse gas reduced. Greenhouse gases include carbon dioxide (CO2), methane (CH4), nitrous oxide (N20), sulphur hexafluoride (SF6), perfluorocarbons, and hydrofluorocarbons. In order to compare these emissions, they must be multiplied by a global-warming potential The most common greenhouse gas emissions associated with agricultural activities are carbon dioxide, methane, and nitrous oxide.
2. What is an offset credit worth? How much will I get per acre?
    The value of an offset credit depends on the type of project, how well the project has been compiled, and ultimately, what the buyer is willing to pay. These credits will trade somewhat under the cost of compliance that companies can choose to pay into the Climate Change and Emissions Management Fund, which is currently $15.00/tonne.

    Smaller projects, like no-till projects, are typically grouped together by an aggregator to create a sufficiently large volume of offset credits to be able to market the credits to large industrial emitters. Aggregators have different pricing models. Some aggregators offer a flat fee to purchase the right to sell the offset credit. This fee is discounted to cover the costs the aggregator will incur to verify and serialize the credits, and any other expenses such as legal fees that may result.

    Other aggregators act as an agent where the cost per tonne offered to the producer may vary depending on the price the aggregator is able to get for the offset credit. Again, these credits are discounted to cover verification, serialization and other costs.

    Project specific factors that affect the cost of a no-till offset credit include:
    • The ecozone in which the field is located
    • Whether the field is being irrigated.
3. I am a renter, do I need the landowners signature? If so, why?
    Yes. The Alberta offset system awards ownership of offset credits to the land owner. That is, the land owner has the right to determine whether or not to allow his/her land to participate in the offset program.

    In cases where the land owner contracts with a tenant to farm their fields, the land owner and tenant must work out a contractual agreement for offsets being generated on the land. The project developer must be able to demonstrate clear legal claim to the offsets achieved from the project to be able to sell them in the Alberta offset system. When two or more parties have potential claim in the offsets, ownership must be established through a contract between the affected parties before the offsets can be registered on the Alberta Emissions Offset Registry.
4. Can the landowner sell the offsets himself even though I am the one doing the operation? Does some of the value need to go to the landowner?
    Offset credits need to be supported by records. Agricultural projects need to provide records to support the activity and ownership (legal right to the offset credits) to be eligible in the Alberta offset system. In cases where lands are rented, the landowner and tenant will likely each have some of the required records and so will need to develop a contractual agreement to sell offset credits that should include percentages of credits going to each party.
5. What kind of records do I need to keep?
    Different activities require different records. Each protocol speaks to the specified records needed to support the activity. Examples of records needed to support a conservation cropping project are provided below. Other agricultural projects will have other record requirements:
    • Proof of crop grown. Detailed farm record sheets plus crop insurance records, location linked time stamped photos.
    • Proof of equipment used. Calculation of soil contact, together with equipment receipts, time stamped photos showing opener width and shank spacing.
    • Ownership of the farm field and the carbon. Land titles and signed agreements.
    • Field location and size. Seeded field area from Google earth, air photos, satellite data, GPS track files.
    • Field operations. Record sheet showing land disturbance operations with equipment specs
    Additional records are required if discretionary tillage was used, there was reseeding, or irrigation took place. Other records can be used in some cases if signed off by a Professional Agrologist.
    More detail and a checklist on what is exactly required for the Conservation Cropping Protocol is available at the main Alberta Agriculture Carbon page linked at the end of this document

    Project developers (aggregators) are also required to develop and retain the following records:
    • The time period or reporting period of the project;
    • Details on how the project was implemented relative to the offset project plan and version of the protocol being used;
    • Any changes in the implementation of the project that arose during the reporting period;
    • Calculation methodologies for emission reductions and removals with clearly identify inputs, emission factors, equations and methodologies used,
    and samples of calculations;
    • Total quantified emission reductions in tonnes of CO2e removed or reduced per vintage year;
    • For aggregated projects, aggregators need to include a “spatial locator template” which has information on project conditions for each individual subproject. For example in an aggregated tillage system the aggregator needs to indicate the legal land location, crop type and emission reductions for each contracted section.
6. Do I need to use an aggregator? Where can I get information on aggregators in my area?
    Technically no, however in practice the large industrial facilities that purchase offsets prefer to buy offset credits in very large quantities and sign a single contract rather than negotiate a number of contracts for small volumes. Aggregators provide valuable services compiling acting as project developers/compilers for small projects, managing data collection, third party verification, serialization, and ultimately marketing and selling of offset credits. These verification and transaction costs can be cost prohibitive for smaller projects; however, a number of projects pooled together can spread these costs out to make the larger, aggregated project economic.
7. How much are they charging for this service?
    The service fees vary between aggregation companies.
8. Why is there no value in perennials/forage? Don’t they sequester more carbon than annual crops?
    Alberta Environment does recognize the value in perennial and forage crops; however just because an activity sequesters or reduces carbon, that does not necessarily mean that it will be eligible to generate offsets. For an offset protocol to be approved the activity has to be beyond business as usual or sector common practice, be proven by scientific research, and be quantifiable and verifiable. Currently Alberta Agriculture is working on a forage protocol that may meet these requirements by converting annual cropland into forage production.
9. Do my credits expire? I should wait and sell them because the price might go up?
    The ability to claim historic credits is no longer available starting January 1, 2012. Historic credits that are already serialized on the registry are honoured; however, project developers and producers are not able to claim new historic credits. From now on credits can only be claimed year by year going forward. This go-forward crediting requires project developers to collect data, quantify emissions reductions, and then verify these reductions according to the offset project plan which is developed before the project is implemented.
10. What is reasonable assurance and what will this mean to my project?
    Alberta Environment requires offset project to be verified by a third party verifier before they can be submitted to the Alberta Emissions Offset Registry. Assurance refers to the level of scrutiny a third party verifier applies to a project. Reasonable assurance is similar to an audit level review for financial records. It requires the auditor to provide a positive statement on the greenhouse gas assertion (offset credits) for the project.

    Alberta Environment and Alberta Agriculture are reviewing all protocols to ensure record requirements are sufficiently detailed to support this higher level of review, which has taken effect on January 1, 2012.

The main Alberta Agriculture Carbon page with information sheets on all the agricultural protocols.

Last updated July 2014 by Paul Jungnitsch, Carbon Offset Agrologist with Alberta Agriculture and Rural Development

For more information contact the Ag-Info Centre at 310-FARM (3276) or Paul Jungnitsch at 780-427-3801
 
 
 
 
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For more information about the content of this document, contact Paul Jungnitsch.
This document is maintained by Stacey Tames.
This information published to the web on August 9, 2012.
Last Reviewed/Revised on July 27, 2016.