Cannabis industry stakeholders support carbon credit research as prices for CO2e Skyrocket
Written by Eric Cingular, Director of Hemp Business Journal
In 2021, the value of carbon is reaching new heights as more companies target net-zero emissions, and governments aim to meet targets set out in the Paris climate agreement. As a result, activity in the compliance markets and voluntary carbon credit trading has soared, setting price records. According to Ecosystem Market, there was a nearly 60% increase in voluntary carbon trading markets from January to August of 2021. At the beginning of November, the value of California carbon futures contracts had increased by 90% over the previous five months. That same month, leaders from around the world gathered at the 2021 United Nations Climate Change Conference (COP26) to set the rules for an agreed international framework on carbon markets. The consensus was on the importance of quality carbon credit, but this ultimately represents a step forward in freeing up trillions of dollars to protect forests, build renewable energy infrastructure, and fund other projects to combat climate change.
We are likely to see more companies and governments making decisions based on ESG values in 2022, especially as the increasingly immediate impacts of climate change, such as severe droughts and wildfires affecting the industrial hemp plant in the western United States, appear to play an important role. . A crop capable of generating carbon credits for farmers by sequestering carbon dioxide in the soil and in sustainable materials made from hemp.
In the past several years, many companies have launched services that track, generate and sell agricultural carbon credits. This service begins on the farm with farmers who adopt renewable agricultural practices, such as growing cover crops and reducing the use of synthetic fertilizers, to increase the amount of carbon uptake (or capture) in their soils. Carbon credits can be created when farmers document sustainability practices that are embedded in many protocols, including the No-Till Conservation Protocols and the Nitrogen Oxide Emission Reduction Protocol (NERP).
as For the US Environmental Protection Agency, US agriculture was responsible for emitting 629 million metric tons of carbon dioxide equivalent (CO2e) in 2019, nearly 10% of the country’s greenhouse gas emissions. Using US farmland as a carbon sink presents a huge opportunity as a 2004 study titled “Sequestering Soil Carbon to Mitigating Climate Change.” estimated Global farmland has the potential to sequester up to 570 million metric tons of carbon annually.
The biggest obstacle standing between earning carbon credits from growing hemp is data. There are strict requirements that must be met to determine and qualify the amount of carbon dioxide sequestered from one acre of cannabis in order to create credits that can be traded in voluntary exchanges. the Most cited study On Soil Carbon Sequestration by Cultivation of Industrial Hemp, authored and submitted to the Australian Government by GoodEarth Resources PTY, Ltd. (for example, GoodEarth Resources), before the latter was dissolved in 2014. The study claims that one acre of industrial hemp absorbs approximately 40,000 pounds of carbon dioxide during its growth cycle. While few land-grant universities and private companies have taken steps to measure and monitor cannabis’s ability to sequester carbon, the approval process and carbon records managed by the United Nations Framework Convention on Climate Change and the Climate Action Reserve are data-intensive and time-consuming to obtain viable results. To repeat on an annual basis.
American hemp growers came a step closer in December of 2021 when Heartland Industries announce that their soil innovation program, “Hemp4Soil,” has been selected as the recipient of a $360,000 grant over a 3-year period from the USDA Natural Resources Conservation Service. This includes the dataset that, according to Heartland, “will establish a framework for trade in agricultural carbon credits.” The grant will allow Heartland to partner with farming communities in more than 10 states to advance research on renewable farming techniques that promote soil health, as well as to identify and qualify carbon sequestration for industrial hemp production.
The growing interest in carbon credits has been driven in part by the skyrocketing price of a ton of carbon dioxide (CO2e) equivalent in the European Union’s emissions trading system (ETS). This was the world’s first emissions trading scheme created to help the European Union achieve the goal of reducing net greenhouse gas emissions by 55% from 1990 levels by 2030. Unlike voluntary carbon trading markets, ETS is a compliance market used by companies And governments that by law must take into account greenhouse gas emissions. ETS requires manufacturers, energy companies and airlines to pay for every metric ton of carbon dioxide they emit. Since 2016, the price of a metric ton of CO2 equivalent in ETS has increased by an average of 65.6 percent year over year. In April of 2021, the World Bank set the price per metric ton of CO2 equivalent in ETS at $49.78. By December, Reuters mentioned The price could rise beyond $100 per metric ton by the end of the year after having risen 50% since the beginning of November.
Indigo Agriculture was one of the first drivers in the gold rush in the North American carbon market. In 2019, Indigo announced a project to pay farmers credits for carbon credits generated by implementing climate-friendly practices and capturing carbon dioxide in farm soils. The carbon credit represents a reduction of one metric ton of carbon dioxide or an equivalent amount of various greenhouse gases. In turn, Indigo sells those credits in voluntary exchange to companies seeking to offset their carbon footprint. The main buyers of carbon credits have been ride-sharing companies like Uber and Lyft, as well as energy companies and airlines.
While there are countless projects and avenues being explored and implemented to capture carbon, McKinsey & Company Expect that nature-based solutions could account for 65-85 percent of total carbon credits supply by 2030. This raises the stakes for accelerating progress in necessary research and data collection to get farmers paid to grow hemp. In the wake of the growing disasters related to climate change, the emergence of ESG, and the creation of a carbon market, the subsidy-like effect of carbon credits for industrial hemp could significantly increase the crop area and accelerate its widespread adoption as a plant. An essential protein component and renewable material that is able to reduce our overall environmental dependence on wood and petroleum.
New Frontier Data will document sustainability efforts and progress related to carbon credit and services available to the cannabis industry in 2022 and beyond. These will be integrated sectors analyzed in upcoming Hemp reports for this year’s new frontier data.
#CBD #Hemp https://newfrontierdata.com/cannabis-insights/hemp-industry-stakeholders-back-carbon-credit-research-as-prices-for-co2e-skyrocket/ Jan 6, 2022 1:58 pm