More than 2,200 Saskatchewan farmers have signed on with a Regina company brokering carbon credits on the Chicago Climate Exchange, or CCX.
Farmers had until Aug. 3 to sign on with C-Green Aggregators to qualify for retroactive payments for carbon credits from land that was minimum-tilled from 2003 to 2006.
C-Green will sell those credits on the CCX to companies that cannot meet their carbon dioxide reduction requirements.
The credits were trading for about $4.30 US a tonne last week, up from about $1.70 a year ago.
Based on carbon sequestration rates of 0.4 tonnes per acre per year for black and grey soil zones and 0.2 tonnes for brown and dark brown zones, that works out to a payment of about $6.88 an acre for black and grey and half that for brown and dark brown.
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The company will pool the returns from the sale of the credits on the exchange and divide the proceeds equally among its clients.
C-Green co-owner and general manager Jeff Gross said the participation rate exceeded his expectations.
All told, 2,274 farmers signed up 5.1 million acres under the company’s plan, which totals 20.4 million acres over the four year period.
“It was a little bit better than I thought,” he said, adding that the company had to work hard to deal with farmers’ questions and concerns reflecting some of the “myths” that have circulated about carbon credits.
Perhaps the biggest challenge after explaining how the program works was convincing farmers that it was legitimate.
“Some didn’t believe it was real; they thought it was too good to be true,” Gross said.
There were also questions about the details of the program, with many farmers focusing on what kind of liability a producer might face if he fell out of compliance with the program rules.
“Guys had heard lots of things, but once they got first-hand knowledge, they said you’d have to be crazy not to sign up,” he said, adding that because the 2003-06 program involves historical tillage practices, the liability issue is no big deal.
“You’re being paid retroactively for something you’ve already done.”
He said the plan is to process and verify the credits by November and send out payments by December.
Once the 2003-06 pool has been dealt with, C-Green will set up a program to cover 2007-10.
The CCX, the only market in North America trading environmental commodities, has been in business since 2003 and trading agricultural soil offsets since April 2005.
There is also an exchange in Europe known as the European Climate Exchange, but it doesn’t deal in agricultural soil credits.
Both exchanges are owned by a European company called Climate Exchange Plc.
