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Pathfinder project #8

Circular Carbon Credits Carbon Credits icon

Project overview

The City of Guelph already produces carbon offset credits by capturing methane from its former Eastview landfill. It sells these credits on the voluntary market to companies wishing to shrink their ne t carbon footprint. Now, we’d like to apply that same concept on a local level. Instead of translating the methane we capture into carbon credits, we’re exploring the possibility of using it to underpin a digital social currency that could be traded locally to help drive our tech-enabled circular food economy. 

Through this carbon-backed digital social currency, we would increase awareness of food loss and waste and reward sustainable choices. For example, a company might choose to reward excellent employee performance with social currency credits, via an app. The employee can then use their credits at a local restaurant that has taken steps to reduce their food waste. The restaurant can use those credits to buy produce from a distributor that is applying circular practices, and so on. Using distributed ledger technology or a facsimile, we’ll be able to quantify the environmental impact of those choices. 

We’re also examining the feasibility of aggregating carbon credits from food and beverage companies. Currently, carbon offset protocols for food waste reduction are limited to diverting green box waste from landfills in Alberta and British Columbia. Ignoring the carbon footprint of food loss and waste that occurs upstream—before food reaches the consumer—means that current offset protocols typically miss more than 90 per cent of the greenhouse gas emissions associated with food loss and waste (Kraft Foods Case Study). 

Our vision is to develop a protocol that will allow companies to earn carbon offset credits for the food loss and waste they’ve avoided. The companies can then sell those credits and use the proceeds to fund further waste-reduction initiatives within the processing sector. To our knowledge, no other jurisdiction has attempted this. This is an opportunity for Canada to chart new territory and demonstrate global leadership. 


Launch municipal carbon credit and social currency challenge

  1. Develop a challenge statement to issue to innovators, inviting them to make this vision a reality. 
  2. From the responses we receive, select the most promising to move forward. 

Policy and prototyping work—aggregate carbon credits from food and beverage companies

Pilot carbon credit aggregation and verification for food and beverage companies 

  1. We’re testing the aggregation of carbon credits for sale on the carbon credit market. As this is uncharted territory, we’re starting with the simplest scenario: selling credits based on energy reductions achieved within food and beverage companies. From there, we can progress to credits for preventing food loss and waste. 

    As a first step, we’ve verified that the KPI Dashboard in the Provision Coalition’s Food Loss and Waste Prevention Toolkit (page 46) provides all the information an independent, third-party verifier would require. 

    Now, we’re looking at which compliance market we can feed into to generate the highest price per ton. Initially, we’re targeting the voluntary offset market, since the requirements are less stringent. Ultimately, our goal is to sell carbon credits to the compliance offset market, which offers significantly more dollars per tonne.
  2. Write a policy proposal to include prevention measures as quantifiable carbon offset credits 

    In 2019, Environment and Climate Change Canada launched consultations on a federal greenhouse gas offset system that would provide carbon credits for emissions reductions that aren’t covered under current carbon pricing. In response, we put forward a policy proposal to include food loss and waste prevention in that offset system. As we highlighted in our August 2019 submission, this is an opportunity for Canada to show global leadership in preventing food  loss and waste and reducing greenhouse gas emissions. 

    We described how these avoided emissions could be quantified, validated and verified. We also addressed the issue of “additionality”—ensuring that carbon credits are only issued for projects that go above and beyond standard industry practices to avoid food loss and waste. At a promising and productive meeting with Environment and Climate Change Canada in February 2020, government officials indicated their willingness to give our proposal serious consideration. 
  3. Develop a case study to support our policy proposal 

    We’ll also develop a case study to support the policy proposal. We’ll develop a case study with a company that we worked with on the business tools and services project—to show as an example of the carbon reduction potential of a food loss and waste prevention project. Our Food Loss and Waste Prevention Toolkit shows the greenhouse gas reductions from the project, so these numbers would be used to build the case. 

Challenges and lessons learned

Validating prevention: One of our key challenges will be to validate that food loss and waste was prevented, rather than simply shifted to another point in the supply chain. We’ll also need to prove that the action was maintained over time.

Exceeding best practices: Another important challenge is to demonstrate that the loss and waste prevention achieved goes above and beyond industry best practices.

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