Carbon capture and storage (CCS) is needed to achieve the world’s net-zero goals and contain global warming, governments say. Its rollout has been slow but is gathering pace.

Swiss commodities giant Glencore plans a three-year, A$210 million (C$190 million) pilot project that would pump 330,000 metric tons of CO2 from a coal-fired power plant in the northeastern state into an aquifer 2.3 km (1.4 miles) underground.

“This is an important test case for onshore CCS in Australia,” said Glencore spokesperson Francis De Rosa.

Glencore says there is no demand for the low-quality, expensive-to-reach water in its pumping site and the CO2 is extremely unlikely to spread significantly from where it is put.

“Our project is based on very robust data, fieldwork and analysis,” De Rosa said, adding that several government agencies had reviewed the plan.

But farm groups say it risks poisoning part of the Great Artesian Basin, a network of groundwater deposits spanning much of eastern Australia that supports agriculture and communities. They say the acidic CO2 in the rock could release and spread toxic substances like lead and arsenic.

The project is “unthinkable,” said Michael Guerin, whose AgForce farm association launched a court case in March to force the federal government to review Glencore’s plans.

Speaking at a beef industry conference this month, Queensland’s premier Steven Miles said the project “doesn’t sound like a good idea to me” and was unlikely to satisfy the state’s environmental rules – prompting a complaint by Glencore that he was interfering in the regulatory process.

“Our project should be judged on the science, not misinformation or political opportunism,” the company said.

Miles’s office declined to comment further. The federal environment ministry declined to comment.

Queensland’s environment department said the state’s independent environmental regulator had considered the potential impacts to groundwater and the Great Artesian Basin and was preparing its final assessment report.

Consequences

The Queensland government will decide by the end of May whether to approve Glencore’s environmental impact assessment. If approved, further permissions would be needed but the main hurdle would be cleared.

Glencore’s plan would capture two per cent of the emissions of the Millmerran power plant but could eventually store 90 per cent, the company said.

The site for the project was originally identified as suitable for carbon storage by a government body.

Australia has only one active CCS project, the world’s largest, at Chevron’s Gorgon liquefied natural gas (LNG) project, on an island off the northwest coast.

Two more are under construction, including the first onshore operation from Santos to inject CO2 into a depleted gas field in South Australia state, and 14 are in development, according to the Global CCS Institute. Most target offshore storage and about half plan to store in depleted oil or gas reservoirs.

The use of aquifers to store carbon is becoming more common, said Alex Zapantis at the CCS Institute. The porous rock of many aquifers can host huge amounts of liquefied CO2. But only those where water is so deep and low quality that it is unsuitable for other use would be chosen or approved by regulators, he said.

The project is being managed by a Glencore subsidiary, Carbon Transport and Storage Corporation (CTSCo). Japan’s Marubeni Corp 8002.T and J-POWER 9513.T each committed A$10 million (C$9.1 million) to it in 2022.

—Additional reporting for Reuters by Melanie Burton in Melbourne

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“We have not seen a dime,” said Barclay Uruski, who farms near Arborg, Man.

Farmers Edge is a Manitoba-based firm that provides digital farm management tools. It launched its Smart Carbon program in 2021, which it said would allow farmers to turn current and new agronomic practices into sellable carbon credits.

According to the Farmers Edge’s website, the program involves simplified and automated data collection through on-farm hardware and sensors. Data is “aggregated on behalf of all farmers in the program to calculate the carbon credits generated.”

It also touts an “aggregated approach for maximum returns.”

Uruski said he has used Farmers Edge’s products for four years. He had decided to unsubscribe, when a Farmers Edge representative asked him to consider joining the Smart Carbon program instead.

“Basically, you will profit and Farmers Edge won’t cost you anything,” Uruski said he was told. “[Farmers Edge] will sell your carbon credits and your nitrogen management.”

The representative sent the farm a proposal. The document, which Uruski provided to Glacier FarmMedia, shows a projected income of just over $6,600 for “historical smart carbon revenue” and nearly $6,800 in “total combined yearly smart carbon revenue.”

The document said figures were an “estimated amount, subject to qualification and if carbon credits are selling at $20/tonne.”

Uruski was under the impression that he could expect a cheque at the end of the year, so he agreed to try the program. He expected that he wouldn’t have to pay for his subscription, though he noted this wasn’t communicated clearly.

The cheque didn’t come. Uruski said Farmers Edge told him, “it’s coming. It’s getting better. You’re going to get more money.”

He was surprised when he received a bill for his subscription. He paid for half and said he wouldn’t pay the rest until he saw the expected cheque.

Two years later, Uruski says he has not received a cheque and Farmers Edge has threatened to take him to a collection agency over the remaining half of his subscription. He said he’s received no explanation for why he hasn’t been paid for his credits.

Uruski posted to farmers’ forums on Facebook, and realized he wasn’t the only one in this situation.

Nathan Allard-Bean, who farms near Rouleau, Sask., said he enrolled in the Smart Carbon program in 2022. He expected to get Farmers Edge services for free in exchange for the credits.

“We had no skin in the game,” Allard-Bean said.

He said he was told Farmers Edge could give him credits for the past four years. The firm suggested he would get $1.50 to $2 per acre on his 12,000-acre farm and he was under the impression that it would give him a cheque for those credits.

“It was promised at a certain time, then another time, and then another time and then no answer,” Allard-Bean said.

He said he hasn’t been able to reach any of his eight Farmers Edge contacts since February and he’s not sure if those employees work there anymore.

Phil Greenwood, who farms near Kisbey, Sask., said he enrolled in the carbon credit program in spring 2022. In a conversation via text message, Greenwood said he signed on with the understanding that credits would pay for the use of weather stations, soil sampling and variable-rate services.

Greenwood said it was his understanding that “we would still be receiving thousands of dollars in net credits after paying for these services.” He was surprised when he received several invoices.

He phoned Farmers Edge and was told to “ignore it for now,” he told the Co-operator. Verbally, he was told he would pay after Farmers Edge paid him for the credits, Greenwood said.

“A few months later, another bill — I believe over $100,000,” he said. “They said I could ignore the $35,000-part as long as I paid the $70,000.”

An email shared with the Co-operator shows Greenwood had more than 19,000 acres contracted to Farmers Edge. When Greenwood asked why his credits wouldn’t pay for his services, he was told “they won’t sell the carbon credits at this time due to current values.”

Greenwood wanted out of the program but was told he couldn’t exit without paying what he describes as “a huge penalty.”

Positive stories

Not all farmers have had bad experiences, however. Korey Peters, who farms near Steinbach, Man. said his only complaint is the reams of paperwork. The Farmers Edge employee his farm dealt with was “very helpful,” he said.

Peters said the company paid up front for the weather station services it received and expected to be reimbursed when the carbon credits sold. The Farmers Edge representative has kept in touch with him, and though he doesn’t believe the farm been paid yet (another family member deals with Farmers Edge), he said he’s not worried.

The credit system

It’s not clear why unhappy farmers have not seen the returns they expected. Farmers Edge did not respond to questions sent by Glacier FarmMedia.

The carbon credit market is unregulated, and prices have been volatile. The average price of credits on the global voluntary carbon market climbed nearly 60 per cent throughout 2021, according to an August 2022 report from Ecosystem Marketplace. The average price of agriculture-related credits was US$8.81 per ton, the highest price across all categories, though actually a 10 per cent decrease from 2020 prices.

Nature-based credits (of which agricultural credits count), have seen a drop in price over the past year, said Kate Ervine, an associate professor at Saint Mary’s University in Nova Scotia. Ervine has studied carbon markets extensively.

Several reports showed that some carbon credit standards bodies approved inappropriate projects, or those that were not actually providing promised benefits, Ervine said. That, in turn, lowered demand for nature-based credits, affecting price.

None of the farmers interviewed by Glacier FarmMedia were aware of a contractual deadline by which their credits were meant to be sold, though some weren’t sure. The company is not legally obligated to include a deadline in its contracts.

“It’s not regulated,” Ervine said. “People who don’t really know about the market, they’re in a vulnerable position.”

There’s a lot of chatter in the voluntary carbon space on how to tackle this issue, she added said.

For those interested in the voluntary carbon market, Ervine advised spending extra time to understand the system or speaking with verification bodies, though she acknowledged these bodies might have a vested interest. She suggested local academics might offer unbiased opinions.

“That’s just ad hoc, so I don’t think that’s the solution,” she said. “Project developers can promise a lot, and if you don’t know the market or understand it, then it sounds really good. Then you find out after that you didn’t have any guarantees.”

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Federated Co-operatives announced Thursday it had signed a memo of understanding with Calgary-based ‘clean energy’ company Whitecap Resources, in which the latter company will store and use carbon dioxide (CO2) emissions captured from Federated Co-op’s fuel plants.

The two companies’ planned operating agreement calls for emissions captured from the Co-op Refinery Complex at Regina — and from the Co-op Ethanol Complex (CEC) wnear Belle Plaine, about 40 km west of Regina — to be transported to and stored at Whitecap’s unit south of Weyburn for later use.

Whitecap’s Weyburn unit is billed as “the single largest anthropogenic carbon sequestration project in the world,” having so far captured over 36 million tonnes of CO2.

The deal calls for FCL to “fund, construct and operate” facilities at its Regina and Belle Plaine plants that would capture almost 500,000 tonnes of carbon dioxide equivalent per year for transport to Weyburn.

FCL, in its release, didn’t give a price tag for its project but Reuters on Thursday quoted the co-operative’s total spend at about $510 million.

FCL said it expects its carbon capture facility at Belle Plaine to be completed in 2024, and commissioning at the Regina refinery starting in 2026.

That said, “final investment decisions” on FCL’s projects will need “clarification” on climate change regulations and incentive programs “that support our transition to the low carbon economy.”

“Today’s announcement firmly positions Saskatchewan as a world leader in innovative carbon capture technology and is just the beginning of significant private investment opportunities in the CO2 sequestration value chain,” provincial Energy and Resources Minister Bronwyn Eyre said in FCL’s release.

“This proposed project will include CO2-enhanced oil recovery, which lowers GHG emissions by 82 per cent compared to traditional extraction methods while increasing production.”

The Weyburn unit Whitecap now owns was discovered in the 1950s and produces mainly light oil. “Waterflood” operations followed in the 1960s and CO2-enhanced oil recovery began in 2000.

“The transition to a low-carbon economy is one of the largest, but most necessary, shifts we’ll have to make in our long history,” FCL CEO Scott Banda said in the same release.

“Carbon capture and the work we’re doing with Whitecap is just one of multiple paths we’re exploring as part of a strategic plan to integrate sustainable solutions into our operations to improve environmental performance.”

Federated Co-op’s CEC, known as Terra Grain Fuels up until March this year, has operated since 2008, came to FCL in 2019 and today produces about 150 million litres of ethanol per year for blending at the Regina fuel refinery, along with 130,000 tonnes of dried distillers’ grains (DDGs) for livestock.

The Belle Plaine CEC’s ethanol feedstocks include about 350,000 tonnes per year of wheat and other “starch-rich” crops such as corn, rye and triticale bought from about 400 Prairie farmers. — Glacier FarmMedia Network

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As part of the same plan to reach net-zero emissions by 2050, Montreal-based Caisse plans to hold green assets worth $54 billion by 2025 and dedicate $10 billion to decarbonize carbon-emitting sectors.

Pension funds globally are under pressure to act on climate change, with several schemes announcing divestments from fossil fuel companies this year.

The new emissions targets for Caisse, which has $390 billion in assets, follow the Ontario Teachers’ Pension Plan Board (OTPP)’s Sept. 16 announcement of new interim plans to cut emissions.

While oil production assets currently make up one per cent of Caisse’s portfolio, the pension fund said it wants to divest it to avoid contributing to growth in global oil supply.

At the same time, it aims to boost the supply of renewable energy, sustainable transportation and real estate and invest in new sectors, such as green hydrogen, batteries, electrification of transport and carbon capture.

Caisse plans to move toward net zero emissions through investments in less carbon-intense assets, carbon budgets for each investment team and bonuses tied to climate targets.

“With this new strategy, we are demonstrating our leadership as an investor and enter the next stage of climate investing,” Charles Emond, president and CEO of Caisse, said in the statement.

“We believe this is in the interests of our depositors, our portfolio companies and the communities we invest in.”

The pension said Tuesday it had exceeded its climate targets, reducing the portfolio’s carbon intensity by 38 per cent since 2017.

— Reporting for Reuters by Maiya Keidan.

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FCL spokesperson Cam Zimmer did not comment on the reason for offering to sell the production business but said the co-op is committed to owning its Regina refinery long-term.

FCL, which made $7.9 billion in sales last year from energy, crop supplies and food, is offering to sell its crude unit, which includes a production base of 3,000 barrels of oil equivalent per day, mostly liquids, and 550,000 hectares of land across Saskatchewan, Alberta and British Columbia, according to the document issued on Monday by Bank of Montreal.

The bank is handling the sale.

Also for sale is FCL’s stake in a carbon capture project at Weyburn, Sask. operated by Whitecap Resources.

The assets may be worth $80 million to $100 million, an industry source said.

In May, FCL said it planned to cut an undisclosed number of jobs at the refinery, after pandemic lockdowns hit its energy revenues in 2020.

More than half of FCL’s revenue came from energy last year, according to its annual report.

— Rod Nickel is a Reuters correspondent in Winnipeg.

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The company seeks to enroll about 1,200 row crop growers in its Bayer Carbon Initiative in the first season, scale up in upcoming seasons, and ultimately expand to other countries, company executives said.

In Brazil, Bayer expects to invest five million euros (C$7.76 million) via the program over three years, the company said in a separate statement in Portuguese. Executives declined to disclose the overall program cost in both countries.

A Bayer representative said via email the pilot “will help inform us on how we can take this program forward in other parts of the world — including Canada.”

The program is the latest in a string of recent environmentally focused initiatives by agriculture companies, which have been criticized for using harmful chemicals and not doing enough to stop deforestation in Brazil.

Global commodities trader Cargill kicked off a project this spring targeting greenhouse gas emissions and fertilizer runoff in Iowa, while agricultural co-operative Land O’Lakes last week announced a multi-year partnership with Microsoft to tackle sustainability and technology goals in the food system.

The announcements came after the U.S. Treasury Department in May clarified a federal tax credit designed to spur investment in carbon capture and sequestration projects.

Bayer’s program requires that farmers enroll in its Climate FieldView digital farming platform, where growers would log data about their eco-friendly farming practices such as no-till farming or planting cover crops. Those claims could then be verified by satellite imagery.

Bayer would compensate growers for sequestering carbon and pay them in cash or credits to buy products on its Bayer Plus rewards platform.

“If farmers are sequestering carbon to the benefit of society and the planet, they should to be rewarded for it,” Brett Begemann, chief operating officer of Bayer’s Crop Science division, told Reuters.

In Brazil, the company selected roughly 500 farmers in 14 states to participate, starting in the 2020-21 crop season with about 60,000 hectares of mainly soy and corn farms.

Begemann said the value of the carbon sequestered would be dictated by the market.

“At the end of the day, we have to have a clear line of sight that this has to contribute to Bayer’s bottom line and benefit our share owners as well.”

— Reporting for Reuters by Karl Plume in Chicago; additional reporting by Gabriel Araujo in Sao Paulo. Includes files from Glacier FarmMedia Network staff.

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The lead opposition party’s plan, launched Wednesday by leader Andrew Scheer, proposes to scrap the Trudeau government’s current carbon pricing plan, which imposes levies on fossil fuel consumption in a bid to improve energy efficiency.

Rather, the Tories said in Wednesday’s document, “we can encourage and support the development of green technology to make environmentally friendly alternatives available. We can do this without making the lives of Canadians harder and more expensive.”

The Conservatives’ document grants that while “natural events can account for some temperature change, research and data show that human activities are a major contributing factor. It is now considered extremely likely that more than half of the increase in global surface temperature between 1951 and 2010 has been caused by man-made greenhouse gas contributions.”

However, the party said, compared to larger greenhouse gas emitters such as China, “Canada is a small contributor to the global problem. By most measures, we account for about 1.6 per cent of total global emissions.”

The party instead proposes a Green Patent Credit and investment in a Green Technology and Innovation Fund, meant to produce more “emissions-reducing technologies” that would allow Canada to have “a global reach on emissions reduction.”

The Green Patent Credit would reduce the tax rate to five per cent on income generated from green technology developed and patented in Canada.

The Green Technology and Innovation Fund, meanwhile, proposes to leverage up to $1 billion in private investment in venture capital for Canadian green technology companies, starting with a $250 million federal contribution and requiring the private sector to invest $4 for each $1 from government.

As an example of the sort of carbon capture and sequestration technology that could be funded, the party said, “our farmers have developed technologies that facilitate no-till or low-till farming techniques, which increases the capacity of the land to sequester carbon. Plant science technologies have also allowed Canadian farmers to reduce their use of diesel.”

Farmers, the Tories noted, “are doing their part in the fight against climate change by improving land-use practices like zero tillage and the use of 4R Nutrient Stewardship. We recognize their contribution in sequestering carbon.”

A Conservative government “will look for ways to support (farmers’) continued development of technology and land-use practices that are good for our environment,” the party said.

“We will work with them to increase the efficiency of fertilizers and land-use methods, maximize the potential of agricultural land to sequester carbon, and ensure that best practices keep pace with the most recent advancements in technology and practice.”

The Tory climate plan’s plank on renewable fuels states that the party’s plan is to “encourage fuel producers to do their part, but we must make sure that we do not put an added burden on Canadians.”

Demand for fossil fuels “will continue for some time, so it makes sense to look at options for lowering their emissions intensity. But we must also consider the impacts on cost, land use, the current state of technology, regional differences in climate, and the ability of existing fleets to accommodate any changes to fuels.”

A Scheer government, the document said, would “work with provinces, territories and stakeholders to increase the availability and use of renewable fuels and to decrease the carbon intensity of Canada’s fuel mix.”

The Tories’ climate plan also pledges “to study the feasibility of an incentives-based program that restores, maintains and protects critical habitats” by identifying regions and ecosystems that provide “significant ecological goods and services” and assessing options for “maintaining or restoring critical habitats in these areas on private lands.”

Such a study, the Tories said, would allow a Tory government to “consider expanding on’ the work of “important programs” such as Ducks Unlimited’s FlexFarm program and Alternative Land Use Services (ALUS).

On a related note, the climate plan also commits Scheer to support the completion of the Canadian Wetland Inventory, at a cost of $15 million over three years.

The Tories’ climate plan also commits the party to maintain support for protection of “significant” watersheds such as the Great Lakes and Lake Winnipeg.

It further commits a Tory government to study “the contribution that Canada’s landscape makes to global emissions.”

Specifically, the party said, “to successfully reduce emissions at home we must understand the contributions of our forests, wetlands, tundra and managed lands as a carbon sink.”

For example, Canadian forests have been a net carbon sink, the party said, “but in recent years, wildfires and pest infestations may have tipped the scale in the other direction. It is vital that we identify not only where we are now, but also where the opportunities are so that we can make better land use decisions for the future.”

‘Expensive and inefficient’

Among the responses to Scheer’s plan, federal Green Party leader Elizabeth May said Thursday that “it can only be a good thing to have a set of proposals to review. And some of the Conservative ideas are worthwhile… But overall, the plan would make the climate crisis worse.”

Scheer’s plan, she said, “worsens the situation by asserting that Canada’s oil and gas sector must continue and expand. It relies on extremely expensive and inefficient technologies like carbon capture and storage, while claiming… that exporting fracked natural gas as LNG will reduce the climate threat.”

Catherine McKenna, the federal Liberals’ environment minister, contended in a party release Wednesday that Scheer “waited until the last hours of this Parliament” to propose a climate plan because “he wanted nobody around to debate ideas that will cost Canadians more while doing less to protect our environment and the future for our kids.”

“This is a plan only an oil lobbyist could love,” Greenpeace Canada climate and energy campaigner Keith Stewart said Wednesday of Scheer’s plan in a separate release. “It checks all the key boxes on the Canadian Association of Petroleum Producers’ wish list and if it ever became federal policy it would deepen the climate crisis.” — Glacier FarmMedia Network

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