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Two brothers from Regina are planting 140,000 poplar trees on 400 acres of marginal farmland near Edenwold and hoping to turn them into carbon credits and ultimately cold, hard cash.

Greenfield Carbon Offsetters Inc., the province’s first carbon offset farm, is also hoping to build a new, green industry in Saskatchewan, which has plenty of carbon emissions and farmland and trees with which to offset them .

Kalen and Derrick Emsley, co-presidents of Greenfield, along with business students at the Paul J. Hill School of Business at the University of Regina, talked about building a green business in Saskatchewan when they were still in high school.

“Kalen was going into Grade 12 and I was going into Grade 11 when we first thought of it,” Derrick said. “We spent that first summer researching, doing as much as we could to get to know the industry and what we needed to do to do what we’re doing right now.”

The idea is simple enough. Grow trees on farmland not suitable for growing crops. Sell the carbon credits from the trees to companies that need carbon offsets. Plant the trees, wait for a few years, then start raking in the money.

Of course, it’s not that simple. First, you need access to land and equipment to plant the trees and manage the land. Then you need experienced planters to plant the trees.

Fortunately, Kalen and Derrick’s father, Doug Emsley, owns a company called Agricultural Development Corp., which buys Saskatchewan farmland, rents it out and sells partnership units in the fund to investors.

“That’s one of the great things about this business,” said Derrick. “It’s scalable to anything we want. We’ve got (access to) unlimited resources through our father’s company, Agricultural Development Corp. That company knows everything there is to know about the farmland in Saskatchewan.

“The fact is we can always get more trees and more land,” added Derrick. “There’s no shortage of land in Saskatchewan. So really the sky’s the limit for this project.”

As for planters, Derrick, 19, and Kalen, 20, hand-planted most of the 25,000 trees Greenfield planted last year, the first year of the pilot project. This year, most of the roughly 115,000 trees will be planted this week by summer students and experienced tree planters.

In fact, the timing couldn’t be better for embarking on a large-scale tree planting project, since the forestry industry in northern Saskatchewan has seen a steep decline in activity in the last few years.

“The planters we’ve talked to said that two years ago they were planting 11 million trees. Now they’re planting 1.1 million (trees),” Kalen said. “If we can keep getting more projects, then we can grow this (businesses) and hopefully help he forestry get back on its feet.”

Of course, the long-term plan is to get more companies to buy carbon credits, which will enable Greenfield to rent more land and plant more trees. “We have access to so much land,” said Kalen. “Any order we get, we can accommodate.”

For example, TransCanada Corp. bankrolled the first pilot project by purchasing the carbon credits for 25,000 trees. Trans-Canada will then use the carbon credits on carbon markets, like the Chicago Climate Exchange, to offset its own emissions.

Brad Farquhar, a director of Greenfield and vice-president of Agricultural Development Corp., said the pilot project with Trans-Canada was undertaken to “prove out the business model” and figure out “how to contract for carbon credits.”

“It’s such a new area,” Farquhar said, adding that the biggest costs, aside from land, are tree stocks and labour. Equipment, like tractors, is leased to keep capital costs down.

Farquhar said having TransCanada as a buyer for the first set of carbon credits was critical in getting the project off the ground. “Our relationship with TransCanada has really helped to grubstake a lot of these costs.”

At present, carbon markets are voluntary, in North America at least, which reduces the value of the credits. But tougher environmental legislation calling for sharp reductions in greenhouse gas (GHG) emissions, in both Canada and the U.S., will soon make such cap-and-trade mechanisms mandatory.

That will eventually make carbon credits more valuable and increase the value of carbon sinks, like Greenfield’s 140,000 poplar trees, which will sequester about 100,000 tonnes of CO2 — equivalent to taking 20,000 cars off the road for a year.

Farquhar said recently introduced provincial environmental legislation will only make carbon credits more valuable as time goes on.

“The province is putting its rules in place and it clearly recognizes the role of carbon offsets. As the verification protocols get nailed down, more and more companies will get comfortable with knowing what it is they’re buying and how it applies to their business.”

For TransCanada, the project enables the Calgary-based energy company to learn more about carbon trading and how it can reduce its carbon footprint.

“We saw this an opportunity to gain exposure to aforestation (newly planted forest) projects and the resulting offsetting credits that would be generated,” said Greg Moffatt, director of environmental regulations for TransCanada.

While TransCanada has been trading carbon credits and offsets in Alberta and the northwestern U.S. for some time, the energy pipeline company had never been involved in an aforestation project in Saskatchewan before, Moffatt said.

“This was chance for us … to support (carbon) market development and activity in Saskatchewan for these kinds of projects, but also … to understand how these projects work.”

Moffatt said even though Saskatchewan doesn’t currently require offsets for GHG emissions, that day is coming soon.

“As the Canadian government moves forward with a cap-and-trade program and the Saskatchewan government moves forward with its Management and Reduction of Greenhouse Gases Act, at some point in time in the future we could conceivably use them.”

For their part, Kalen and Derrick — who are both Hill-Ivey scholars and will complete the last two years of their business degrees at the Richard Ivey School of Business at the University of Western Ontario — are getting invaluable business experience from the project.

“When we’re learning things in class, we’re able to apply them,” Derrick said. “It’s learning through experience, as well as through school. We can really use our knowledge, in and out of class.”

“It’s been a great job, it’s been fun, and it’s been a great learning experience.”

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Tags: canada carbon, Carbon Capture, carbon offset