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New Carbon Bank aimed at increasing selling options for clients

By: Allison Chorney

  |  Posted: Thursday, Mar 13, 2014 10:33 am

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Carbon Credit Solutions Inc. (CCSI), located in Airdrie, is launching a new Carbon Bank that will allow clients to bank carbon credits for future sale.

Carbon credits come into play for companies that produce more than 100,000 tonnes of carbon dioxide a year. In Alberta, these companies are required to reduce their emission intensity by 12 per cent annually. To meet this target they have three options: implement new technology that reduces greenhouse gas emission, pay $15 per tonne to a provincial technology and research fund that develops ways to further reduce air pollutants, or purchase carbon credits from a third party.

“Regulatory changes in Alberta have reduced our client’s ability to profit from carbon credits and we want to give them the opportunity to maximize the return on their credits,” said CCSI President Alastair Handley in a press release. “Once our client’s credits are registered, they can choose to sell their credit immediately or set them aside to be sold at a later date, and if all goes well at a much higher price.”

A carbon credit is created when an organization, landowner or farmer adopt a new practice that reduces carbon dioxide emissions.

CCSI Chairman Ed Alfke said, for farmers, carbon credits are created because their large crop fields absorb the emissions, much like trees do, and sequester the carbon in the soil.

According to CCSI the carbon credits are usually sold off as soon as they are produced and carbon credit producers aren’t given the opportunity to sell them at a higher price. The new bank will allow carbon credit producers to hold onto the credit in the non-interest bearing trust account for carbon credits until the producer want to sell the credit.

“We have to provide value to farmers. That is critical,” Alfke said.

The move from CCSI to create the new bank comes in response to the anticipated increase in the price of carbon credits in Alberta following the suggestion from Environment Minister Diana McQueen in April 2013 of a 40/40 increase made in the spring of 2013. The proposal, if passed, will require large carbon emitters to reduce emissions by 40 per cent or pay a $40-per-tonne fee if they exceed the 100,000 tonne limit.

However, Premier Alison Redford has discredited the 40/40 number and said it isn’t a number the government has committed to.

Regardless if the 40/40 proposal proceeds or not, Alfke said the new Carbon Bank will allow their clients to hold onto their credits until a price increase occurs.

Carbon credits are one of the fastest growing industries in global trade markets with sales quadrupling in 2006 to more than US$25 billion, according to the World Bank.

They came into effect in Alberta on July 1, 2007 when the province was the first in the country to introduce greenhouse gas legislation.


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