The company has launched a program that works with growers interested in producing and selling carbon offsets in voluntary offset markets
A leading supplier of crop nutrient products says the rollout of a new carbon credit pilot program for farmers is on track for 2021 and has exceeded expectations in North America.
Officials with Nutrien say the company was hoping to have about 100,000 North American acres subscribed to its “carbon farm” program in 2021.
That number includes acres in Western Canada and the United States corn belt states of Illinois and Ohio.
Mark Thompson, Nutrien’s executive vice-president, said the program has already exceeded its North American target for 2021 and will likely be expanded in 2022 and beyond.
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“Really, the goal was to get about 100,000 acres in the program in 2021 and to work with growers to understand what’s working, what can be improved and how we can streamline the processes,” said Thompson.
“We’ve had really good uptake. We’ve had far more than what we were targeting from an acreage standpoint.”
Nutrien, one of the largest suppliers of nitrogen, phosphate and potash products, has more than 2,000 retail locations around the world and annually provides crop nutrient products to more than 500,000 farmers.
In late 2020, the company announced its entry into the rapidly growing carbon offset market.
Nutrien’s carbon farm program will work with growers who are interested in producing and selling carbon offsets in voluntary offset markets.
According to some sources, the voluntary market for carbon offsets has doubled in value since 2017.
Thomson said Nutrien offers what it calls the ag industry’s “most comprehensive end-to-end carbon program” for farmers.
“Because of the unique retail footprint that we have… we feel like we’re in a very advantageous position in the value chain to push this initiative forward,” he said.
“(It’s) shaping up to be a pretty robust buyer universe with a lot of demand for these types of offsets.”
Through the carbon farm program, Nutrien will work with growers to establish a carbon base line for individual farms.
Once a base line has been established, the company will work with growers to design and implement customized crop plans aimed at increasing the amount of carbon that’s sequestered in the soil or decreasing farm-based nitrous oxide emissions.
Growers will have the option of adopting a variety of agronomic practices that, according to the company, are scientifically proven to reduce greenhouse gas emissions.
Carbon base lines will be established using a variety of tools, including traditional soil sampling equipment, and will take into account a number of factors including past agronomic practices, current soil properties and soil types, and regional carbon sequestration potential, among others.
Agronomic practices that can be used to produce offsets will range from the adoption of low disturbance cropping practices or minimal tillage, to the use of specialized crop nutrient products such as slow-release fertilizers, nitrogen inhibitors, biological and micro-nutrients, and variable rate fertilizer prescriptions.
The entire system will be supported by digital platforms and data collection programs that enable monitoring and quantification.
Thompson said interest in the program from farmers, policymakers and other value chain partners has been strong.
He described the North American rollout as a pilot program that will eventually be expanded to other continents where Nutrien’s retail footprint is already established.
In Canada, growers who are interested in learning more about the program are encouraged to contact territory or branch managers at Nutrien Ag Solutions.
“We’ve had really positive responses and we’re probably oversubscribed for 2021 but we do still want to hear from growers.”
Across the West, interest in the production and sale of farm-based offsets has been gaining momentum, particularly since Ottawa established a federal carbon tax that attaches a value to carbon emissions.
Canada’s carbon tax rate is currently set at $30 per tonne but is scheduled to increase to $40 per tonne in April and $50 per tonne in early 2022.
The Liberal government has also indicated its intention to increase the carbon tax rate incrementally until it reaches $170 a tonne by 2030.
As the markets for voluntary carbon credits and GHG offsets become more established, it is expected that more farmers and land managers will recognize carbon offsets as a new revenue stream that can supplement net farm incomes.
Thompson estimated that growers could eventually earn as much as $30 to $50 an acre by following a variety of GHG reduction “recipes” under Nutrien’s program.
Potential revenues will ultimately depend on carbon credit valuations in voluntary markets.
“I think at a really high level, for credits to be verifiable and sort of stand the test of scrutiny in voluntary (offset) markets, we’ve got to ensure that agronomically the programs are sound, that it’s backed by science and that it can be statistically measured and replicated,” Thompson said.
“That’s why, I think, we’re focused on doing this on a pilot stage first and making sure we gather really good data and we know how the practices impact outcomes.”
Thompson said there are signals to suggest that markets for carbon credits and GHG offsets are gaining momentum.
The United States has already signalled its intention to support the development greenhouse gas (GHG) offset opportunities in that country and Canada is expected to follow suit.
Ottawa has stated that it is in the process of developing a GHG-offset system, but so far no details of the plan have been released.
“I think you’re seeing loud and clear in the U.S. a desire to — at the national level — really create a scalable program (for agricultural offsets),” Thompson said.
“Our belief is that we need the same thing in Canada….
“Clearly, at a federal level — and I think at the provincial level — there’s a desire to position Canada as a leader from a carbon economy standpoint and in this transition to a low carbon economy,” Thompson continued.
“We believe really strongly that agriculture has always played an important role in food security but if we formalize these (carbon) programs in the right way, I think we really put agriculture in an advantageous position to actually achieve the national ambitions that we have around climate leadership.
“Certainly, we’re seeing this as a positive opportunity to turn carbon into an asset for the grower, and not a liability….”
