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Green Cattle Producers Can Make Extra Dollars

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A Calgary company is offering a way for cattle producers to get into the carbon-credit business.

It s certainly a positive financially, said Brandon Grant, operations manager with Failsafe Canada. For those producers who meet the requirements of these projects, it s really just extra revenue for doing the right thing for the environment. In terms of downside, there really isn t one.

Many producers are familiar with, and take advantage of, carbon-offset credits available for other environmentally friendly agricultural practices, such as no-till cropping systems. Failsafe Canada s projects are the first beef-related carbon-offset projects in North America, and perhaps globally.

A carbon credit represents a single tonne of carbon dioxide that is removed from the atmosphere by sequestering it in plant material (in anything from trees to soil organic matter). Farmers who employ recognized environmentally friendly agricultural practices can sell carbon credits. Failsafe s new projects allow producers to earn carbon credits at two stages in the beef-production cycle.

Our main job is to commercialize protocols that are put in place by the government, to define ways that producers can claim emissions credits, and then to get those credits to the market on their behalf, said Grant.

Finish sooner

The first is a beef cattle age-reduction project that offers carbon credits to producers who finish their cattle at an earlier-than-average age. If producers can bring the animals to an average slaughter weight more quickly, the animals will emit greenhouse gas for fewer days per pound of beef produced. For example, a finished steer that weighs 1,400 pounds at 19 months would release 1.4 tonnes less greenhouse gas than an animal that takes 21 months to reach the same weight. Under this scenario, a producer could expect to earn up to $8 per head from carbon offsets.

It s a very low-risk process, considering the reward, said Grant. For large and smaller producers that are calving out their own and finishing their own, you see that those animals are very short lived compared to a feedlot animal. There s a lot of value here, even for a smaller-scale cow-calf operation.

The second project allows producers to collect carbon credits for reducing days on feed during the finishing feedlot period, mostly due to reduced backgrounding.

Now that paperwork is a mandatory requirement, if you ve been on top of your paperwork, (qualifying for beef credits) shouldn t be too strenuous, said Grant.

The first pilot of the beef production project, conducted at Cattleland Feedyard s Strathmore facility, went seamlessly, said Grant. This spring, Failsafe began a larger project involving about 45,000 cattle to further test the viability of this kind of carbon-offset project.

There are two primary markets for carbon offsets, the bigger of which is the compliance market. Many countries require large-scale greenhouse gas emitters (any operation that produces more than 100,000 tonnes of greenhouse gas per year) to reduce their emissions either by cutting them, paying a penalty to the government, or purchasing carbon credits.

The second, much smaller, market is a voluntary one. Buyers in this market are typically motivated by ideology or want to market themselves as green companies.

Rules tightening

Alberta is currently tightening up its carbon-offset regulations. As of January 2012, verification rules will be more stringent and in March 2012, the province will remove the historical credit allowance (currently credits can be earned for practices as far back as 2002), which means only current practices will be eligible for credits.

Alberta is becoming significantly prescriptive, said Grant. It may preclude many producers from claiming under the Alberta system for Alberta buyers.

That said, Failsafe plans to continue offering producers dollars for historical credits. While the (beef production) program we re developing will be in correlation with existing protocols in Alberta s offset program, these offsets may not be sold to Alberta-based large-scale emitters, said Grant. If credits don t meet some of the requirements for Alberta, they just won t be sold in Alberta.

We re not necessarily beholden to the Albertan offset program. We will bring historical emissions credits to buyers where they can be found. I would say normally they would be North American, but in recent experience, that s not true. In terms of voluntary reductions, projects are being sold around the world.

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Forthoseproducerswhomeettherequirementsoftheseprojects,it sreallyjustextrarevenuefordoingtherightthingfortheenvironment.Intermsofdownside,therereallyisn tone.

BRANDON GRANT

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