That will be me, Mr. Chair.
Good afternoon, everybody. My name is John Moffet and I'm the assistant deputy minister of the environmental protection branch, which is the regulatory branch for environmental protection measures. I'm here this afternoon with my colleague Tara Shannon, who's my counterpart as the ADM of the Canadian Wildlife Service.
As Mr. Parry explained, Canadian farms have an important role to play in reducing greenhouse gas emissions through the implementation of conservation activities or by adopting new management practices or technologies. I'm going to discuss one additional way in which Environment and Climate Change Canada is creating incentives for reducing greenhouse gas emissions, and that is through the development of greenhouse gas offsets.
As we indicated in our strengthened climate plan that was published in December, the government is developing a federal greenhouse gas offset system. This system will encourage cost-effective reductions of greenhouse gas emissions from activities that are not covered by the federal carbon pollution pricing system, including many potential activities in the agricultural sector. Offsets can provide a financial incentive for an activity in the form of a credit that can be sold to offset an equivalent amount of greenhouse gas emissions from another source.
We published draft regulations to establish the offset system in March, a couple of months ago, and we aim to publish the final regulations this fall.
In addition to being used as a form of compliance under the federal pricing system, we expect there will be additional demand for federal offset systems from other sources, including, for example, in helping companies reach carbon-neutral or net-zero commitments, of which we are seeing an increasing number. Because offset credits substitute for a reduction in a regulated sector, we need to establish rules to ensure that offset projects achieve real, additional, verified, quantified and permanent reductions in greenhouse gases. This means that in order for any conservation activity or land management practice to generate credits, it must essentially be above and beyond business-as-usual practices. It can't be for something that is already required by law, it can't be for something that is covered by current pricing, and it can't be for something that is a business-as-usual practice.
In order for a project to generate offset credits, the way we determine that a project is eligible is to ensure that it follows an approved offset protocol. These protocols set out a consistent approach for quantifying emission reductions and removals for eligible activities. By going above and beyond business-as-usual practices on their farms, agricultural land managers will not only benefit from the opportunity to generate offset credits, they will also benefit from enhancements in soil health and productivity.
The specific farming practices that will be able to generate offset credits will be established through the protocol development process. In other words, the activities that will be eligible to generate credits will depend on activities for which we have developed protocols. We've started to work on the first set of protocols, and among the first four is a protocol to support enhanced soil organic carbon. This protocol will create opportunities for farmers to generate offset credits through the adoption of sustainable agricultural land management practices that increase soil organic carbon levels.
As you would expect, this protocol is complex and requires further research and consultation with stakeholders. We've engaged an expert committee to advise us, and we expect to develop the protocol at some point in 2022.
We are also looking at other possible offset protocols relevant to the agricultural sector. These include activities such as livestock feed management, avoided conversion of grasslands, reduced nitrogen oxide emissions from fertilizers, anaerobic digestion and livestock manure management.
That's a quick overview of our federal greenhouse gas offset system and the way in which it might create opportunities for the agricultural sector. I would be happy to answer any further questions you have about this initiative, and my colleague will be happy to describe some of the activities that are under way in support of wildlife and biodiversity protection.
Thank you.