CARBON CREDIT AGGREGATION PILOT PROJECT

The Chicago Climate Exchange (CCX) is a voluntary, pilot GHG emissions trading program targeting emissions and offsets in North America (US, Canada and Mexico) as well as limited offset projects in Brazil. The work is being carried out under the direction of Environmental Financial Products, LLC. For more information visit www.iowafarmbureau.com or www.chicagoclimateexchange.com. The Iowa Farm Bureau is working to aggregate carbon credits from farmers for sale on the Chicago Climate Exchange.

Carbon sequestration in soil and biomass will be recognized on the CCX through credits generated by projects that are registered and verified on the Exchange. Additional on-farm GHG emission reduction activities, such as methane capture and reduced nitrogen application, are also eligible for carbon credits.

Exchange Soil Offsets (XSOs): To be eligible, the land enrolled in the XSO certification program must be capable of being cropped – that is, the land could be utilized for row crop or small grain production even though it may currently be in a harvested grass or forage crop. If such lands are farmed with row crops during the pilot project period, such crops need to be produced in a compliant no-till or strip-till manner. Cropland that was put into CRP prior to Jan 1, 1999 will NOT be eligible for XSOs. Cropland that is in a harvested hay crop as part of a crop rotation is eligible. XSOs will be issued at the rate established by the CCX for eligible Land Resource Regions.  Rates vary by regiona.  Enrolled acres may be planted in soybeans no more than two of every four years.  Current Soil Offset contracts extend through 2010.

XSOs will also be issued to farmers who commit to maintain soil carbon storage realized as a result of establishment of grass cover plantings on eligible land (land that is capable of being cropped) that were undertaken on or after January 1, 1999. The land must remain in permanent grass cover through 2006. XSOs for these recent grass cover plantings will be issued at a rate of 0.75 metric tons CO2 equivalent per acre per year (CCX Zones A & B). In the event that the land fails to meet these requirements, all XSOs from such land shall be null and void and any payments for XSOs delivered prior to January 1, 2010 shall be repaid subject to interest and penalties as provided in the sales agreement.

Definition of Conservation Tillage: For CCX purposes these practices are as defined in the Natural Resources Conservation Service National Handbook of Conservation Practices. These definitions are: No-till/Strip-till - Managing the amount, orientation, and distribution of crop and other plant residue on the surface year-round while growing crops in narrow slots or tilled or residue-free strips in soil previously untilled by full width inversion implements;

Pricing: The transfer price of the XSOs covered by this contract shall be the sales price as determined by sale through the Chicago Climate Exchange less a 10% service fee.

Enrollment: Enrollees must complete and submit an “Application for Participation in Chicago Climate Exchange Soil Carbon Pool and Credit Sale Contract for Exchange Soil Offsets (XSOs). Applications can be obtained from the Iowa Farm Bureau, 5400 University Ave, West Des Moines, IA 50266 or by calling 515-225-5431. Through 2006, more than 900,000 acres have been enrolled.