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Carbon Price
Over this last month, I've had several questions about what's happening to the price of carbon offsets in Alberta. First, the price is set by the levy on Alberta's output-based pricing system. That price is $80.00 per tonne today and $95 as of April 1, 2025.
There is a trading platform in Alberta that helps us gauge the price of offsets. Over Christmas, the price was around $40 a tonne. In marketing terms, that's roughly a $40 basis. As of the end of February 2025, the price has dropped to $28.00 a tonne.
A widening of the basis results from the availability of production offsets. These are the credits a company can generate because they have met or surpassed their emissions targets. They can sell those credits to other facilities in Alberta that haven't reached their compliance milestones.
At the last public briefing, the Alberta government indicated roughly 1/3 of the offsets come from production offsets, 1/3 from voluntary offsets (like ag), and the rest pay cash.
Consumer Carbon Levy
You probably know by now the consumer levy attached to the farm use of natural gas and propane is $0.00 a tonne as of April 1, 2025.
This is impacting several parts of an agricultural operation. First, you will undoubtedly see a change in the levy on your natural gas and propane bills.
The second thing is that you will see a change in your quarterly carbon rebate if your family gets one. The last rebate will be issued on April 22, 2025.
The third thing is the agricultural refundable tax credit for carbon will stop after your farm files its 2024 tax return. Recent CRA messaging indicates it will not be part of your 2025 tax return.
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