32 The Business of Prairie Agriculture Better Farming | November/December 2023 is the cornerstone of the pricing system, “value is determined by the number of offsets created by the farm and ultimately the project,” says Minister Sigurdson. “When the offsets are sold, the farmer will receive payment – either based on the contract they will have signed with the aggregator or from the registry directly if they listed their own project.” The scale and type of farm will determine which protocols and practices are possible, and how much value producers can create through the generation of carbon offsets. Concerns remain Carbon offset production holds opportunity for a variety of farms. Producers may still have questions about if these programs are practical and if they are worth the extra demands required of them by carbon sequestration projects and verification. Anders says that he has seen some hesitancy surrounding carbon offset programs. “Because it’s not an established sector yet, answers can be hard to come by. Specifically, how to do it, and how do they get money from it,” says Anders. “The individual farmer also would likely find it difficult to navigate the paperwork and processes to qualify for carbon offset. Most farmers shy away from uncertainty, wondering if it’s going to be worth their while to do all this.” This concern has also been shared with Minister Sigurdson. “There are a few concerns that we have heard over the years. The main ones are that emission offsets require too many records, and offsets are not allowed be created in the past anymore, meaning it’s a ‘go-forward’ basis only,” says Sigurdson. Anders says that the necessity of a “go-forward” project, as described by Minister Sigurdson, also presents concerns. The projects need to be additional to what is already being done on farm, and also need to be long-term. “To meet the additionality and permanency requirements, the farmers need to lock into a practice and they aren’t really sure what the payout will be,” says Anders. “On the larger scale, it may make more sense because they are sharing risk. A lot of farmers are basically walking away from it. If the return isn’t big enough the farmer might be better off growing canola.” One final concern of carbon offset production would be the costs of projects. “The costs of managing the project can quickly add up and negate any proceeds. It is imperative that potential project developers conduct proper due diligence before engaging in an offset project,” says the Saskatchewan Ministry of Environment. Minister Sigurdson says similar costs exist in Alberta’s program. “Another consideration is that one farm may not generate enough emission offsets to cover administration and verification costs for a project. Usually, farmers will sign a contract with an aggregator who can bundle several projects together to reduce these costs. Aggregators have expertise on offset system rules and requirements but will expect compensation in some form for the service they offer,” says Sigurdson. Carbon offset programs are a step in the right direction environmentally and may offer producers opportunities to be paid for practices they already intend to implement. However, the ability of farmers to participate in the carbon market may be limited by farm scale, production type, or cash flow. As the carbon offset industry develops and more offset purchasers come into play, current concerns may be addressed, and the trading of carbon credits may become feasible for more producers across the Prairies. BF Carbon Offset Programs EMILY CROFT Emily lives on a beef farm, raising Red Angus and Simmental cattle. She holds a Master of Science in Animal Biosciences, with a focus on ruminant nutrition. Alberta’s Low Residual Feed Intake Markers in Beef Cattle Protocol encourages more efficient genetics. Tracy Miller photo
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