Canadian Hog Industry Expected to Be Trading Carbon Credits in Early 2006

Farmscape Article 1934-October 8, 2005

Canada’s pork sector expects to become the first Canadian agricultural industry to be in a position to begin trading carbon credits.

Draft Protocol on the Verge of Completion

A pork industry working group, under the direction of the National Offsets Quantification Team (OQT), has developed a draft protocol to calculate the amount of greenhouse gas offsets generated from hog farms in Canada. The first draft of the technical seed document is in the final stages of completion and should be released to the public within the next few weeks.

Karen Haugen-Kozyra, of Alberta Agriculture Food and Rural Development (AAFRD) and the coordinator of the pork technical working group, describes the tool as, “A methodology to calculate the amount of Greenhouse gas offsets and reductions that can be done from changing practices on hog farms in Canada.”

Protocol Intended to Ease Potential Carbon Offset Calculations

She explains, “The Canadian government is setting up a carbon credit market and one of the sectors that can participate in generating credits for the market is agriculture, and yet, there is a lot of uncertainty around what kind of practice change on farms results in how many greenhouse gas reductions.”

“What this thing does,” she says, “is it allows a producer to apply it, collect some data from the farm and crunch the numbers through formulas and coefficients and give him or her an idea of how many tonnes can be reduced.”

Canadian Pork Council greenhouse gas mitigation coordinator Cedric MacLeod stresses, “The protocol is based on the most available science we have which is applicable to Canadian conditions and the Canadian way of operating hog farms.”

Scientific Backing Critical

“Science and climate and production factors were used in the development of the protocol so it was very much Canadian industry specific,” he says.

MacLeod suggests, “One of the important things to consider when you’re developing a package of carbon credits to sell is that you have to implement a certain practice but you have to reference that practice back to some base line.”

He explains, “We undertook to develop regional protocols that really reflected the difference between east and west in Canada for pork production, out west using primarily wheat, barley, canola based diets with some soybean meal. In Eastern Canada we're certainly looking at more of a corn soybean based ration.”

“We had to make sure that we had sound science,” he explains, “so when it [the protocol] says do practice A, get reduction X, that we have the science to back it up.”

He insists, “That’s very, very important both domestically and internationally when it comes down to protocols and following the rules of actually developing and trading carbons.”

Protocol Identifies Three Key Reduction Opportunities

The package identifies three key areas where Canadian Swine producers can make improvement and potentially gain greenhouse gas reductions.

According to MacLeod, “The first would be feeding.” He points out, “Obviously crude protein reductions in our feed and supplementing with synthetic amino acids is an important component of production to save costs and to gain efficiency on our farms but that reduced nitrogen output that results from feeding lower crude protein diets actually reduces the amount of nitrous oxide in the fields.”

“Also, improving the feed conversion means that you have less wasted feed and less bypass through your pig of feed carbon. The less carbon that goes into the manure storage, the less methane that you're getting there.”

“The storage is the second component,” he continues. “If you empty your manure storage prior to conditions of warmer temperatures so, if you're emptying that in the spring, you're not subjecting the carbon that flows from your barn into the storage to high temperatures which means higher methane yields.”

He says, “The third area is going to be field applications. If you’re doing a really good job of targeting nitrogen application rates and being very precise in how much nitrogen goes down and really tracking what the crop is taking up so you don’t have over application and residual nitrogen in the fall to be subjected to wet soil conditions, then there's also some opportunities to reduce our emissions there.”

Protocol Designed to Minimize Additional Record Keeping

Rob Jansen, a professional agrologist with the consulting firm Agrologics, adds, “The package is designed so that it can be implemented with minimum change to existing record keeping processes.”

He notes, “The information that farmers need to record are things like how much feed they buy, how many pigs they sell, at what weight, manure spreading practices, in terms of when they spread, what proportion of their manure output they spread at that time, things like that.”

“The protocol itself, equations, formulas, coefficients, all those calculations will be imbedded in the protocol. Farmers won’t need to use them.”

 “The focus for farmers will be to change the way they manage their feed and manage their pigs and then change they way they store manure and how they spread it.”

“When the farmers change the practice and record how they’ve changed them,” he points out, “those changes are then converted to calculations and quantifications for reductions by the protocol.”

Package Allows Recognition of Good Practices Already Being Adopted

Manitoba Pork Council’s emergency management and technical affairs specialist Jeff Clark sees, “some key areas that need to be developed further.” However, he views the protocol as, “An opportunity for farmers, and hog producers specifically, to capitalize on some of the energy efficiency measures they’ve already been using.”

“It’s not going to be wads of money but there'll be some income that they can receive back. In Manitoba anyway, I see the offset systems as maybe some added incentive to do some enhancements on farm that they may be inspired to do otherwise,” says Clark.

“As an example, the Manitoba government has some stiff regulations for hog production that definitely jive with the proposed offset system that I think hog producers can benefit from.”

He suggests, “There's a number of different programs that are all leading producers into the same direction and I see the offset system as maybe some added incentive to go that route. It has the potential to provide one additional avenue to justify the costs of management practices they would like to or are already planning to adopt.”

Program Expected to Increase Canada’s Competitive Ability

The vice chair of Sask Pork is confident the ability to participate in the carbon credit market will help enhance Canada’s ability to compete with other nations that are already doing so. Ross Johnson says, “From the producer’s point of view we're happy to see it move along.”

"There’s indications that aggregators are gathering up credits or working on trading credits in a few other countries," he states. Adding, "Brazil is one, for example, that we know actively has programs going."

He suggests, “It seems to have been a very long drawn out process. Because we live in a cold climate, the science that’s involved isn’t as quickly applicable to our country. So, to ensure that we are actually producing the credits, they have to come up with the right science and that’s taken extra time.”

“Some of the countries where the climate is warm and the protocols were actually written for have been able to probably move into the programs a little quicker,” he speculates.

“Although we’ve got this draft protocol,” states Haugen-Kozyra, “There’s still a little way to go.”

“The rules for the market are not finalized yet, [but] we’re hoping to see those rules in November, December. So this draft protocol will be changed a little bit from what it is now.”

She expects the draft to made available to those people interested in looking at it, within the next few weeks, following an internal review by Environment Canada and Agriculture and Agrifood Canada.

ISO Certification Process Already Underway

The package also has to clear the standardization process. However, Jansen points out, “The protocol is written in a format that's compatible with the ISO (International Organization for Standardization).”

MacLeod expects ISO approval by the end of December. “We’re looking at standardization and having the document back from the International Standards Organization before Christmas of 2005.”

He adds, “The carbon credit trading system domestically is scheduled for launch January 1, 2006. Although we may be looking at some time in early to late spring of 2006 before credits actually get traded.”

However he says, “Credits will be offered retroactively back to January 1, 2006.”

MacLeod concludes, “We’re getting very close to a point when we’re actually going to be using some of this information and putting this protocol to work.”

Staff Farmscape.Ca