Regulations designed to impose greenhouse gas reductions on large industrial facilities came into effect July 1, but details on how the system for registering carbon credits will work is still months away, said Karen Haugen-Kozyra with Climate Change Central, the provincial agency in charge of the program.
Under the new rules, Alberta facilities that emit more than 100,000 tonnes of greenhouse gases a year will be required to reduce their emissions by 12 percent.
Companies have three ways to make reductions. They can make operating improvements, buy Alberta-based credits or contribute to a climate change fund.
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The lack of clear guidelines for the registry and its operation is generating more questions than answers, especially for farmers who can sell carbon credits to the large facilities, said Warren Norton of PrairieSky Consulting.
“The whole market is in its infancy and there’s lots of questions about it.”
One of the biggest questions is how much carbon is sequestered in the land with good agricultural practices and what its value is to farmers.
C-Green Aggregators, a Regina company that signed up Saskatchewan farmers to sell carbon credits on the Chicago Climate Exchange, believes that 0.4 tonnes of carbon per acre is sequestered in the black and grey soil zones. Payments are made on that value.
Alberta recently released its own report that said 0.14 tonnes of carbon per acre are sequestered in the province.
“That’s quite a bit lower,” said Norton who has worked with C-Green as a consultant.
Who determines value?
Norton foresees problems because each company selling contracts has its own scientists creating sequestration numbers. Some may place a higher value than they’re worth, he said.
In Alberta, the credits must be verified before trades are approved. Norton’s concern is for farmers who sign a contract where rates are high but later the rates can’t be verified.
“If it’s too high farmers may be liable,” said Norton.
He advises farmers to learn about carbon credit trading before signing a contract. There are no deadlines for signup to access carbon credits back to 2002.
He also advises reading the fine print carefully before signing.
Haugen-Kozyra said in the coming months farmers and industry can go to Alberta Environment’s website and try and find a suitable match between those who want to sell carbon offsets and those who want to buy them.
“There’s still time to get things in place for people to trade carbon,” she said.
The agency will hold a series of carbon trading workshops in rural areas this fall to help farmers understand how they can benefit from the new carbon trading rules.
