Iowa Farm Bureau Carbon Credit Aggregation

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Iowa Farm BureauCarbon Credit Aggregation
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Topics to be Covered

• What is Carbon Sequestration?
• Background on the Chicago Climate Exchange
• Exchange Offsets
• Exchange Offset Sales Contracts

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What is carbon sequestration?

• Transformation of atmospheric carbon to a
  fixed-state carbon. Land-based carbon
  sequestration is typically done through
• Forestry
• Increased Soil Organic Matter (SOM)
• Reduced tillage
• Grass plantings
• Rangeland Management

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What are Carbon Credits?

• Carbon credits encompass two ideas
• (1) Prevention/reduction of carbon emissions
  produced by human activities from reaching the
  atmosphere by capturing and diverting them to
  secure storage.
• (2) Removal of carbon from the atmosphere by
  various means and securely storing it.

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Atmospheric Carbon

• CO2 levels are rising
• Source neutral
• Reductions
• Credits
• Offsets
• Global

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The Chicago Climate Exchange

• Phase 1 Pilot Project 2003 - 2006
• Phase 2 Pilot Project 2006 - 2010

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The Chicago Climate Exchange

• The Chicago Climate Exchange (CCX) is a
  greenhouse gas (GHG) emission reduction and
  trading pilot program for emission sources and
  offset projects in the United States and for
  offset projects undertaken in Brazil. CCX is a
  self-regulatory, rules-based exchange designed
  and governed by CCX Members.
• These members have made a voluntary, legally
  binding commitment to reduce their emissions of
  greenhouse gases by four percent below the
  average of their 1998-2001 baseline by 2006, the
  last year of the first phase of the pilot
  program.

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CCX Reduction Timetable

• 2003-2006 Reduce emissions to 1, 2, 3, 4
  below 1998-2001 baseline
• 2006 2010 Reduce emissions to 6 below 98-01
  baseline

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Meeting CCX Reductions

• Allowances (x less than baseline)
• Own reductions
• Industry credits from excess reductions
• Offsets (no more than 50 of reduction
  requirement)
• Industry
• Agriculture
• Forestry

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Farm Bureau Aggregation

• Exchange Soil Offsets (XSOs)
• Continuous No-till, ridge-till or strip-till
• Grass plantings after Jan 1, 1999
• Rangeland Management
• Exchange Forestry Offsets (XFOs)
• Exchange Methane Offsets (XMOs)

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UCurrent Region for CCX Soil Offsetssets
Offsets for no-till or grassesOffsets for
grasses only
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Eligible Areas

• Zone A for no-till new grass
• Zone B for new grass
• Efforts underway to establish credit rates for
  areas not included in Zones A or B
• Hope to have the expanded area approved for next
  sign-up which is taking place Nov 2006 June
  2007.

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IFB Pool 1-3 Statistics
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Exchange Soil Offsets (XSOs)

• Commitment to 5 years of conservation tillage
• Annual certification of compliance
• Credits transferred to FB on Jan 1
• 20 reserve held until end of pilot project
• Transfer price will be the price as determined by
  sale through CCX less a 10 service fee.

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Tillage Equipment

• Full width inversion
• Moldboard plow
• Chisel plow
• Field cultivator
• Tandem disk
• Offset disk
• Row crop cultivator (except ridge till)

• Okay to use
• No-till/ridge-till planter
• No-till drill
• Rolling harrow
• Anhydrous applicator
• Manure knife applicator
• Ridge till cultivator

• General Guideline After the implement has been
  through the field, there must still be a
  substantial amount of surface residue present and
  the soil disturbance must not be full width. If
  use of the implement would require that a
  leveling or smoothing activity follow, it would
  probably result in too much soil disturbance.

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Forestry Offsets

• Eligible Projects
• Planting and/or natural regeneration after Jan 1,
  1990 on land not forested on Dec 31, 1989.
• Credits based on annual increase in carbon stocks
  (CO2 equivalents) during 2003-2010.
• Long-term commitment
• Evidence that the carbon stocks in forest parcels
  will be subject to long-term maintenance in a
  manner deemed acceptable by CCX Offset Committee
  (easement, contract, etc.)

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Forestry Offsets Contd

• Protective status instruments
• Long-term conservation easements providing that
  the land will be maintained as a forest
• Transfer of ownership of land parcels to a land
  trust, qualifying non-governmental organization
• Other means that the CCX Offset committee deems
  acceptable
• Statement of Intent

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Forestry Statement of Intent

• Statement of Intent to Maintain Forest Cover and
  Manage
• Forestry Offset Land in a Sustainable Forestry
  System
• I,___ ______, hereby attest that it is the
  intent of the owners of the land enrolled in the
  Chicago Climate Exchange Forestry Offset program
  through the Iowa Farm Bureau contract number
  __XFO-0000_ to maintain the enrolled land in
  forest cover and to manage such lands in
  compliance with the principles and practices of
  sustainable forestry systems.
• _____________________________
• Owner
• _____________________________
• Date

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Forestry Offsets Contd

• XFOs will be issued based on annual increases in
  above-ground living biomass.
• Small forestation projects are subject to
  verification by CCX approved verifiers.
• Working with CCX to establish initial assessment
  protocol.
• Credits allocated according to tables in CCX
  rulebook

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Methane Offsets

• Credits for destruction of ag methane
• On-farm digesters
• 18.25 tons CO2 per ton of methane destroyed
• Digesters put into operation after 1999.
• Credits for years 2003 - 2010

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Mechanics of Ag Offset Aggregation in CCX

• CCX
• issues offsets to aggregators registry account
• commissions verifiers

documentation
offsets

• Aggregators
• accepts initial registrations from producers
• assembles annual attestations of activities from
  producers
• receives offsets into CCX registry account from
• executes sales on CCX trading platform on behalf
  of growers
• manage multi-grower reserve account

documentation
sales proceeds
Individual Growers - register undertake actions
as per 4-year contract sign annual attestations
allow access to CCX verifiers ultimate owner of
offsets
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Carbon Offset Prices2004 - 2006
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Enrollment Forms

• Enrollment forms are available at
• www.iowafarmbureau.com

• http//www.iowafarmbureau.com/special/carbon/defau
  lt.aspx

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Contact Information

• David Miller
• Director, Commodity Services
• Iowa Farm Bureau
• 5400 University Ave
• West Des Moines, IA 50266
• Ph 515-225-5431
• E-mail damiller_at_ifbf.org