Generating Carbon Credits with Hemp
Most of the Information on this article was derived from this video featuring Alistair Handley the founder of Radicle (formerly Carbon Credit Solutions Inc.)
Carbon Credits (What is it? How does it work?)
“A carbon credit is a tradable permit or certificate that provides the holder of the credit the right to emit one ton of carbon dioxide or an equivalent of another greenhouse gas — it’s essentially an offset for producers of such gases. The main goal for the creation of carbon credits is the reduction of emissions of carbon dioxide and other greenhouse gases from industrial activities to reduce the effects of global warming.” (Source)
Types of Carbon Credits
Insetting: A company can reduce CO2 emissions by making changes within it’s supply chain process.
Voluntary: The goal of this is to voluntarily reduce emissions. Generating or purchasing credits on a voluntary basis which means that this is not required to reach government compliance targets. Typically managed through a third party registry.
Compliance: The goal is to comply with mandatory government carbon emission targets Created through regulations at the national and sub-national level.
Top 10 Countries participating in Carbon Credits
Carbon Emitters have 3 options
- Do nothing and pay the government for any emissions over the limit.
- In a way, the company is buying carbon credits from the government for each tone of carbon that has been emitted. The cost of these credits is usually higher than what it would have been if the emitter decided to be proactive and buy credits before hand.
- This encourages companies to be more proactive and take action in either investing in carbon credits or innovating.
- The government uses this money to fund carbon credit generation projects, which keeps a circular market.
2. Innovate practices to reduce the emissions of CO2.
3. Invest in Carbon Credits
Carbon Credit: From Generation to Retirement
Stakeholders in the Carbon Credit Market
The Regulator
- Governing authority in charge of creating rules under which the market operates.
- Create and approve protocols , which are recipes that are used to convert emission reductions into carbon credits.
- Ex: For Alberta, Canada this is Parks and Environment.
Compliance Entity (The Buyer/Sponsor)
- Entity that must reduce emissions or can also purchase credits to reduce compliance costs .
- Ex: Shell Oil Company, that has significant carbon emissions
Verifiers and Auditors
- Entities that operate as referees to keep a check on companies.
- Verify that emissions reported by companies are accurate.
Registry
- This is the official Scorekeeper.
- Credits are registered with the registry, they keep a track of everything.
Project Operators/Owner
- Can be any private person, company or other organization.
- Companies that act on government approved protocols to generate credits.
- Generating credits through activities such planting trees, etc.
Project developer
- Companies that represent project operators.
- Have a good understanding of regulations, protocols and credit development process. They can also manage the process of credit generation, verification, and sale of credits.
- Example of company that has worked as a Project Developer in the past: Radicle (formerly Carbon Credit Solutions Inc.).
Auditor General
- Oversees every aspect of the market and creates annual reports on the carbon market for the government's review.
- 1 hectare of industrial hemp absorbs 22 tones of CO2 per hectare.
- Hemp reaches full size in approximately 100 days
- Hemp is prone to an insignificant level of diseases and insects.
- Hemp can grow in a wide range of climatic zones.
Hemp Carbon Credits: From Idea to Execution
Currently hemp farming for carbon sequestration is not listed in the Canadian government's approved protocol list. The first step to making this happen would be to lobby the government into adding this to the list of approved protocols.
For hemp to be used in credit generation, it must first be understood by the vast majority of public as an efficient carbon capturing plant. For this to be done, we must clearly lay out that hemp has the capacity to pass the carbon credit verification process. Once this is done, it will allow companies to take on the growing of hemp on voluntary basis to generate carbon credits that can later be sold to carbon emitters.
This same principal can apply for companies that work with products that can be manufactured with hemp. Due to the large variety of products that can be grown with hemp. It can play a key role in a lot of industries to sequester significant amounts of carbon, therefore generating carbon credit or reducing compliance costs. Hemp Industries include Energy, Textiles, Construction, Bioplastics, Cosmetics, Food and more.
