Cap-and-Trade Proposal: Impact on Handlers

Agriculture has not paid much attention to the development of the recently released cap-and-trade system for greenhouse gas emissions (GHG) proposed by the California Air Resources Board because production agriculture is exempted. However, food processing facilities, including almond handlers, are not exempted if their facility includes a form of stationary combustion such as a natural gas dryer. As drafted, the California League of Food Processors estimates that some 38 of their members will have to reduce their greenhouse gas emissions within the cap-and-trade system.

Additional facilities may either be required to report their GHG emissions (i.e., annual registration fees) or be included in the cap-and-trade system if the trigger limit is lowered. The current proposal is that any facility that releases more than 25,000 metric tons of carbon dioxide equivalents annually will be included in the California cap-and-trade system starting in 2012. ARB asks in its proposal whether the trigger limit should be lowered to 10,000 MT CO2eq.

ARB is also proposing that all the allowances—the amount of CO2eq that may be emitted in a year—be auctioned in an open auction. Thus a food processor could be competing with an electricity or oil company to buy the allowances needed.

Our next article in April will consider some of the options almond handlers are exploring or implementing to reduce their GHG emissions.

Click Part I, What Does Greenhouse Gas Regulation Mean for California Almonds? or Part II, Cap-and-Trade: What's in it for the Almond Industry? to view other articles in this series.

For more information on air quality issues, visit almondboard.com/airquality.