| | Overview
Alberta-based Offset Credit System
One option for large industrial emitters who need to comply with the province's greenhouse gas emissions reduction program is to purchase offset credits from other sectors that have voluntarily reduced their emissions in Alberta.
Credits must be created using protocols approved by the Alberta government, which were developed in partnership with stakeholders and based on international research. The protocols outline how to quantify and verify emission reductions for different types of projects (e.g. no or reduced tillage, biomass and biofuels).
All credits used to meet the reduction targets must be verified by an independent third party.
For more information on the offset credit system in Alberta, click here.
Changes in the Market
In late November 2010, Alberta Environment announced the elimination of historical credits. Projects proponents have until December 31, 2011 to complete projects and have until March31, 2012 to verify and register those tonnes.
After January 1, 2012 a project can only collect tonnes that have been created after this date. Project proponents has a couple of choices. They can collect, verify and register tonnes on a cyclical basis. They can also economize costs and delay projects until they have sufficient tonnes to verify and register.
Why is this Important to Farmers?
All credit projects, that meet the current protocol, have until March 31, 2012 to be verified under the present verification assurance level. Farmers can transact on all lands from 2002 to the end of the crop year in 2011. The announcement does not change the evidence required. Farms still must provide evidence of acres farmed, correct tillage implements and tillage passes, ownership of the credit, annual crops planted and correct location.
After January 1, 2012, the market will change. All offsets (Tillage, NERP as examples) will change to a go forward credits. The credits will now be verified at a reasonable assurance level. Reasonable assurance is the same standard as a full financial audit. As a result, the 2012 and forward credits will be as good as an audited financial statement.
Does this impact price?
The current maximum price in the market is $15 per tonne. There are discounts in this price as the credit purchasers (power producers) buy the offset from project aggregators. The aggregators are taking their cut and then pass on the net to farmers. The current price range is a 40 cent spread around an average of $1.60 per acre. There are unique price quotes from each of the aggregators.
What is happening in the animal credit protocols?
At present (April 2011) three beef protocols are being publically reviewed. This review ends May 1, 2011. In the event they are approved by Alberta Environment, the protocols are available to transact on by feedlots and project developers.
For more information
Farmers’ Advocate Office
305-7000 113 Street
Edmonton, AB T6H5T6
310-FARM |
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