Market News

 September 15, 2006
Fertilizer can earn emissions credits

 Toronto, Ontario (GLOBE-Net) -- A new organic fertilizer that promotes soil sequestration of carbon dioxide can help Canadian farmers reduce their greenhouse gas emissions, earn carbon credits, and lower fertilizer input costs by half.

Intelegacy Corp., based in Pickering, Ontario, is selecting the site for their first organic fertilizer plant in Canada. President and CEO Ian Cumming told GLOBE-Net the company is involved in negotiations with a provincial government in Atlantic Canada, and hopes to start production in the Spring of 2007.

In the meantime, demand will be met through imports from California, where organic fertilizer technology is currently in use. The technology is not that complicated says Cumming, but organic fertilizers have always been a hard sell because they are perceived as a 'fringe' product that usually costs more.

However, this organic fertilizer makes both economic and environmental sense; it is price-competitive with synthetic fertilizers, but can deliver long-term savings because it actually reduces fertilizer requirements through use, and can earn carbon credits that further lower costs.

According to the company, while synthetic chemical fertilizers propagate the release of carbon dioxide from the ground, the organic fertilizer reverses that trend, enabling the natural sequestration of CO2 in soil.

The company is currently working with engineers to define a protocol for soil sequestration in agriculture according to the rules set out by the United Nations' Framework Convention on Climate Change. This requires considering soil type, climate, tillage, irrigation, past and future land use, pesticide practices, and other factors.

Once a sequestration protocol is defined according to the rules of the Kyoto Protocol, use of the organic fertilizer could earn carbon credits for carbon dioxide that is stored. The credits will be aggregated and managed by Intelegacy, and the resulting revenues will be partly applied to help farmers lower their input costs.

Cumming said that the company has been speaking with the federal government and Environment Canada about recognizing the sequestration protocol once it is developed, as the government does not have a protocol of their own yet.

Should Canada's upcoming climate change plan include a stipulation for carbon credit trading, farmers could provide a ready source of offset credits for Canadian companies, allowing a significant reduction in emissions. Should Canada not develop a carbon trading scheme that allows farmers to participate, use of the fertilizer will still generate emissions credits through the Kyoto Protocol, of which Canada is a signatory.

According to the World Bank, agriculture accounts for 20 percent of greenhouse gas emissions worldwide through the release of carbon from soil, changes in land-use, and crop decomposition. The potential for carbon sequestration, or the storage of carbon in natural 'sinks' such as forests, plants, and agricultural soil, could represent a vast, untapped source of the emissions cuts needed to stabilize the global atmosphere.

According to Cumming, studies from the University of Nebraska place carbon sequestration from organic fertilizer application as high as 90 tonnes per acre; his company is looking at verifying a much lower figure in the range of 40 tonnes per acre each year. The Intelegacy plant will produce enough fertilizer to supply 1.2 million acres of farmland, and could result in carbon dioxide sequestration of up to 50 million tonnes per year -- one quarter of the 195 Mt by which Canada currently exceeds its Kyoto Protocol target.

Organic fertilizers also allow farmers to use less water on their crops, reduce chemical runoff, and cut the amount of nitrates in the water supply. The use of synthetic pesticides can cause a host of environmental problems that increase their long-term economic cost.

For example, Mississippi basin farmers apply roughly 21 billion pounds of fertilizer and 283 million pounds of pesticides in a year, creating an excess of nutrients that absorbs oxygen from the water. The effect of this has been seen in the Gulf of Mexico, as an area of over 20 000 square kilometres becomes completely devoid of ocean life each summer - the world's largest "dead zone". Canadian agricultural regions have seen algal blooms and other contamination as a result of synthesized agricultural products.

Most fertilizers in Canada are imported from petrochemical sources. Cumming likens the country's dependence on foreign, chemical fertilizers to North America's dependence on imported oil.

Organic fertilizers also recycle by-products from other industries. Production inputs for the fertilizer include fish waste products that are normally disposed of and are treated as pollutants. Locating in Atlantic Canada allows the company to have a ready supply of its feedstock.

Since applying the organic product replenishes the natural biota and mineral health of fields, farmers will also require less fertilizer each year. Cummins estimates that after three years, fertilizer requirements will be cut in half, and so will the cost. This represents a real source of savings to farmers, and will allow them to reduce their dependence on subsidies, he adds.

For more information click here.