Nutrien expands on program to extract value from carbon

Will western Canadian producers one day receive compensation for using farming practices that reduce carbon emissions?

Nutrien thinks so.

In fact, the company, a world leader in potash and nitrogen fertilizer production, has developed programs and partnerships it says will allow growers to create and monetize “high-quality carbon assets” in North America and around the world.

Earlier this month, Nutrien announced details of what it calls a comprehensive end-to-end carbon program.

The program will use data collection, agronomic advice, carbon measurement and verification strategies and supply chain partnerships to create marketable offsets.

The offsets created through Nutrien’s programs will belong to farmers and will be sold through voluntary offset markets at prices that are determined in an open market, based on supply and demand.

Brent Smith, vice-president of marketing, sustainability and proprietary products with Nutrien Ag Solutions, says Nutrien is building an infrastructure that will allow growers to create and sell so-called “carbon assets”.

That infrastructure includes nine North American pilot projects — three of them in Canada — aimed at reducing greenhouse gas emissions.

The pilot projects involve Nutrien, as well as high-profile supply chain partners such as Syngenta, BASF, Corteva, PepsiCo, and Maple Leaf Foods.

Farmers who use Nutrien products and services will be key to the success of the pilot projects.

“What we’re trying to do as Nutrien and Nutrien Ag Solutions … and with our partners, is we’re trying to get the highest value and the highest quality carbon asset that we can get for a grower…,” said Smith.

“Our intent is not to participate in the value that a grower is getting from a carbon asset,” he added.

“What we’re trying to do is help get them the highest quality (carbon) asset by using solutions and tools offered by Nutrien.”

“We believe that we have all the things (products, services and partnerships) to be able to work with the grower… to build the solutions that they need to get the best return on their investment… and also the best monetization of their carbon asset.”

In a recent interview with The Western Producer, Smith described Nutrien’s carbon initiative as a portfolio of pilot projects that will be tested, developed and eventually scaled up to include growers.

In 2021, the nine North American pilot projects will comprise more than 200,000 acres of farmland, including more than 160,000 acres in 15 American states and nearly 40,000 acres in Alberta, Saskatchewan and Manitoba.

The Canadian pilots include a large grain grower pilot in central Saskatchewan and a supply chain partnership pilot with Maple Leaf Foods in Manitoba.

“The plan is definitely to expand” the programs in the future, Smith said.

“Ultimately, what we’re trying to do is get to scale. So how do we scale this and make it available to our customers across the whole network that we operate in Canada and the United States and then the other countries around the world?”

The details of each pilot project will differ from one region to the next but all projects will be aimed at achieving a desired outcome — namely reduced emissions and the production of marketable, farmer-owned carbon assets.

“The portfolio approach really allows us to test various scenarios in different crops, soil types (and) climatic zones,” Smith said.

In Saskatchewan, Nutrien’s large grower pilot will involve a single producer who follows prescribed agronomic advice and uses recommended practices and products on a 5,000 acre commercial grain farm.

Field data will be collected. Carbon reductions will be measured and verified. And carbon offsets will be created and monetized.

Specific elements of the Saskatchewan project could include the use of slow release fertilizers, variable rate fertilizer applications, micronutrients and biologicals, agronomic advice, low-till or no-till cropping practices and the use of cover crops.

In other pilot projects, the involvement of partners such as Corteva, Syngenta, BASF, PepsiCo and Maple Leaf Foods suggests that large corporations see value in partnering with farmers to achieve their own environmental outcomes.

According to Smith, the value of farmer-owned carbon assets will be determined by supply and demand in an open and unregulated offset marketplace.

All assets or offsets created through Nutrien’s programs would be farmer-owned, he added.

“Nutrient could be a buyer of that credit. We have a footprint that we need to offset as well.”

“One of our (corporate) partners could also be a buyer.”

Smith suggested that the value of high-quality agricultural offsets will increase over time.

“What I would say is that we’re supply constrained today (in terms of) high quality agricultural assets being created.”