A Regina-based company that sells carbon credits on the Chicago Climate Exchange (CCX) on behalf of farmers will be sending out cheques totalling about $7 million.
Jeff Gross of C-Green Aggregators said about 1,400 farmers with contracts for 2006 and 2007 will be getting a share of close to $5 million.
That works out to an average payment of about $3,500 per producer.
In addition, 2,100 farmers who had already been paid about $20 million on contracts covering the period 2003-06 will be getting an additional $2 million once a tax issue involving the GST is settled.
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That makes for a total payment of about $7 million on old and new contracts.
Gross was reluctant to predict when the cheques will be mailed.
“We hope it will happen in May sometime,” he said, adding the company is again waiting for a decision from Revenue Canada.
Under the C-Green program, farmers agree to use minimum tillage practices and appropriate equipment during the life of their contracts.
Most of the company’s business is done in Saskatchewan, although there are some contracts in Alberta and Manitoba. About five million acres were signed up in 2003-06 contracts, and about four million on 2006 and 2007 contracts.
Carbon sequestration rates are set at 0.4 tonnes per acre per year for black and grey soil zones and 0.2 tonnes for brown and dark brown.
Prices during the life of the 2006 and 2007 contracts were in the range of $3 to $5 per acre per year.
Based on an average value of $4 per tonne, that works out to $1.60 per acre per year in black and grey zones and 80 cents in brown and dark brown.
Carbon is trading at around $2 per tonne on the CCX.
On the Chicago Climate Futures Exchange, December 2013 contracts are valued at around $12 a tonne, reflecting traders’ expectations of prices in an anticipated federally regulated cap and trade system.
Gross said the recent introduction of legislation in the U.S. House of Representatives, called the American Clean Energy and Security Act, was significant for carbon trading.
The bill provides for the promotion and large-scale use of carbon capture and storage and will allow for trading carbon credits across international borders.
The bill is expected to pass into law in late 2009 or early 2010.
Meanwhile, C-Lock Technology Canada Inc. has announced an extension of a business relationship with Viterra that will see the creation of agricultural-based carbon offsets to be sold under the Alberta government’s Carbon Offset Protocol.
C-Lock Canada is a division of Denver-based C-Lock Technology and Evergreen Energy Inc. The company provides technology that allows for rapid, accurate, low-cost quantification of carbon offsets.
In a news release, C-Lock said Alberta’s carbon market, the only operating government regulated carbon program in North America, is the ideal testing ground for what can be accomplished across Canada and the U.S. in the future.
Under the Alberta program, large greenhouse gas emitters are subject to a tax of $15 per tonne for greenhouse gas pollution or are allowed to offset the tax by purchasing carbon offsets. Proceeds from purchase can go to farmers who sign contracts under the protocol.
