We see signs of infancy across all carbon markets, including the one for woodland carbon. The absence of pricing transparency, which we are keen to rectify, is the most obvious symptom. Meantime, we continue to work hard to address others which we feel are important steps to ensure the healthy development of the market so that it meets both landowners’ and companies’ needs and wishes.
Recent pricing trends in the UK’s woodland carbon market
Turning to recent prices for PIUs across the UK market for woodland carbon, recent reports suggest wide variations continue with prices ranging from £9 up to £25. We have recently heard one large mixed conifer and broadleaf scheme on the west coast offered £9 per PIU though the origin of that offer implies the selling price to any corporate could be markedly higher.
We are also aware of well-located broadleaf projects in southern England which would accept offers around £20 for their PIUs. This suggests the ‘real’ price could lie between £16-£17. Other conversations have indicated a price for PIUs around £12 in Scotland and slightly higher as the proximity to the south-east increases which broadly reflects the two quotes cited above.
Price transparency is vital to the market’s healthy evolution. As we have noted elsewhere, there are two principal parties in the woodland carbon market: the landowner selling the PIUs and the company buying them. It is vital that the former is compensated properly for planting young, carbon-oriented woodlands while the latter also pays an equitable price for their woodland-based carbon credits.
Until now, the modus operandi in the woodland carbon market has distorted this important function. Carbon traders, by buying from one and selling to the other, have distorted the true price of PIUs. CarbonStore is keen to address this. If any readers, be they buyers or sellers of PIUs, have useful and informative details regarding pricing across the woodland carbon market, please email me at email@example.com
Robust Legal Contracts: An Essential Tool for any Sale Agreement
An important element of this new approach is the need for robust and comprehensive legal contracts between landowners and corporates.
Natural capital assets, such as woodlands, are inherently susceptible to natural events and these are no one’s fault. Unfortunately, they are also susceptible to irresponsible practice.
Companies must have faith in the sequestration claims implicit in PIUs and WCUs. Indeed, this is essential to maintain their value. Robust and comprehensive legal agreements between landowners (as the sellers of PIUs) and companies (as their buyers) are therefore needed which articulate the risks, responsibilities, and indemnities for each party.
CarbonStore has invested significant time and resources developing the necessary legal contracts which protect the interests and outline the responsibilities of the two parties in any woodland carbon transaction. As one leading lawyer recently told us: “You could drive a coach and horses through many of the existing contracts in the market and CarbonStore’s is a much needed development in the market.”
Explaining the Principles and Protocols of the Woodland Carbon Code
Part of the challenge in developing legal agreements is the complexity of the Woodland Carbon Code. Understanding the difference between a PIU and a WCU is only the start.
There is the UK Land Carbon Registry to navigate, the role of Project Developer to understand and the registration, validation and verification processes to get to grips with. Any landowner wishing to sell PIUs and WCUs needs a basic grasp of these processes.
We, in CarbonStore, will therefore be shortly publishing our ‘Users Guide to the Woodland Carbon Code.’ The numerous rules and regulations associated with the Woodland Carbon Code are all premised on sound logic. By explaining these, alongside the various practical steps necessary to generate PIUs and WCUs, we hope to achieve two goals:
For companies: By explaining the Code’s underlying principles and the rigorous checks and inspections required by it, we hope it will foster greater credibility in its PIUs and WCUs which, in turn, will increase their interest in UK based, carbon-related, woodland projects.
For landowners: A basic understanding of the Code’s whys and wherefores will help them appreciate the undertakings involved when they sign, for example, the Landowner Commitment Statement (required by the Woodland Carbon Code) or the Communications Agreement (required by the UK Land Carbon Registry).
Of course, CarbonStore can help with the practical steps. We can register your project in the Land Carbon Registry, complete the Project Design Document (required for validation), fulfil the Project Developer role for you and take the paperwork and bureaucracy off your hands. However, a basic awareness of the Code’s principles and practices is essential to understanding what that all means.
Government Outlines Newer, Higher Woodland Creation Targets
Beyond the confines of the woodland carbon market, its related markets have also witnessed some interesting developments over the past month. On 8th May, The Times carried an article discussing the government’s longer-term targets for woodland creation.
Uncited sources were reiterating the manifesto commitment to plant 30,000 hectares per year by 2025. However, these same sources also introduced a new, much higher longer-term goal to plant 50,000 hectares per year from 2035. Against 2019/20 new planting rates, this represents a rise of 2.3x and 3.8x respectively.
Guarding Against Nascent Capacity Constraints
As chart 1 below illustrates, this would represent a sea change across the forestry industry so it is crucial that these quantitative targets don’t jeopardise quality. We will need more forestry graduates acquiring the necessary skills and expertise, we will need more properly trained and qualified contractors to undertake the planting work and we will need more forestry managers to design and supervise the planting.
Any objective assessment of both the industry and the company will show that Tilhill is uniquely wellplaced to help protect landowners against these risks. It is the only UK-wide woodland and forestry company. Its forestry managers have a bank of forestry knowledge unmatched by any other UK company. And it recruited a record number of graduate foresters in 2020.
However, aside from these latent capacity issues, landowners should also keep in mind that the government will likely be reluctant to maintain the levels of grant funding for woodland creation that are currently available. The costs would be unreasonable. They therefore need to nurture an incentive scheme through the private sector, hence the development of the Woodland Carbon Code.
Actual and Forecast New Planting in the UK, 1976-2050e (‘000 hectares)
EU Carbon Prices at Record High
The recent rise in EU carbon allowance prices (to €50) has therefore garnered much attention from farmers and landowners. After all, increased woodland creation will require larger incentives as governmental targets force us all to look in new places for plantable land.
Attention on these markets is likely to intensify as 19th May approaches and the UK holds its first auction under our new domestic Emissions Trading Scheme. Initial prices in the UK are likely to reflect closely their European counterparts but, thereafter, government policy will be the main influence in these compulsory carbon markets.
Backlash to the EU’s Carbon Border Tax
The recent backlash to the EU’s proposal for carbon border tax is therefore significant. The EU’s aim is to put a price on imports from countries where it is cheaper to pollute, in order to protect European manufacturers facing higher carbon costs. Unfortunately, it has been described as ‘extremely complicated’ by the US climate envoy’s team and ‘discriminatory’ by certain emerging economies, including Brazil, India, and China.
At every level, carbon markets are finding their feet. National governments disagree over environmental policy. Carbon markets lack transparency and liquidity. Private sector participants are grappling with the basic principles. Fortunately, the UK government is taking a decisive lead in global environmental policy so, with COP26 in Glasgow approaching and the eyes of the world’s conservation movement shifting in our direction, the pressure to reduce our carbon footprint is likely to grow.
Fourth Woodland Carbon Guarantee auction dates announced
£10m available from the scheme’s £50m pot for farmers and land managers to create new woodlands to help tackle the effects of climate change. The scheme gives land managers the option to sell Woodland Carbon Units (the carbon captured once the trees have grown), to the government at a guaranteed price protected against inflation. The […]
Creating Woodlands For Cash, Carbon and Conservation in England
Head of CarbonStore David McCulloch Joins Panel Free Webinar: Tuesday June 22nd – 11am Tilhill, the UK’s leading forestry management company announces the latest in a series of free webinars. The webinar on 22 June will focus on exploring the new funding offer for woodland creation in England. The webinar will take farmers, landowners and […]
FCCWG Webinar -The Importance of Carbon in a Climate Emergency
The Forestry & Climate Change Working Group with CarbonStore The Forestry Climate Change Working Group (FCCWG) present this Workshop Webinar; a free online workshop for forestry practitioners exploring the importance of carbon in a climate emergency. As a result of the UK’s commitment to becoming a Net Zero economy by 2050, carbon sequestration is likely […]
The outlook for the woodland carbon market appears encouraging. Its regulatory standard, the Woodland Carbon Code, has used the lockdown gainfully to update its rules and guidelines, expand its capacity and widen its recognition among both landowners and companies. With the UK now (slowly) emerging from the lockdown, pressure for a ‘green recovery’ is growing. […]
Creating Woodlands for Cash, Carbon & Conservation Webinar
Head of CarbonStore David McCulloch joined Tilhill for this informative webinar entitled ‘Creating Woodlands for Cash, Carbon & Conservation’ – Scotland which included three onsite interviews. David answered all carbon related questions from landowners, farmers and industry professionals. Watch the full recording covering: The landowner’s objectives Evaluating the land and farm potential How agriculture can […]
Free workshop: Tuesday 20th April 11am The Forestry Climate Change Working Group is delighted to announce the launch of a free online workshop for forestry practitioners and will explore the importance of carbon in a climate emergency. As a result of the UK’s commitment to becoming a Net Zero economy by 2050, carbon sequestration is […]
The UK’s woodland carbon market is evolving rapidly. Preliminary enquiries, more substantive indications of interest in buying PIUs, and firm orders for them from companies have all picked up markedly through January and early- February. Similarly, woodland owners are quickly recognising the opportunities from selling their woodland-generated carbon credits. The number of schemes being registered […]
World Wetlands Day – Restoring a globally important habitat
Forestry and Land Scotland’s (FLS) ongoing work to restore a globally important habitat is being celebrated as part of World Wetlands Day (2 Feb). Blanket bog is a type of habitat found on peatland soils in cool, wet upland areas in maritime climates. It covers 23 per cent of Scotland’s land area and is rarely […]
Webinar: Crafting Nature-Based Solutions for Your Business
What are nature-based solutions? How can they help your organisation? How do they work, in practice? CarbonStore explains. Through Tilhill, we have 70 years’ experience in planting trees and restoring peatlands. Watch our free webinar discussing these issues. The webinar outlines the fundamental principles of nature-based solutions, focusing particularly on woodland creation and peatland restoration. […]
The business of net-zero: Natural climate solutions – CLA Podcast
Listen to CLA’s podcast supported by Tilhill. ‘David Attenborough’s recent Netflix documentary did an incredible job making the case that the key to solving climate change is right in front of us: nature. Nature is our biggest ally, inspiration and the best, most cost-effective, shovel-ready technology we have to tackle the climate crisis.’ In this podcast we focus on […]
CarbonStore Sponsor 2021 Tree Oscars to reward Climate Change Champion
A new Climate Change Champion prize has been added to Scotland’s Finest Woods Awards as the ‘Tree Oscars’ return in 2021. The Climate Change Champion Award, sponsored by CarbonStore, will be chosen by judges from entries to all 2021 Awards categories. All entries can identify and highlight what their project will contribute to tackling climate […]
The Benefits of Nature-Based Solutions for Your Company and Its Environmental Goals
Webinar: Crafting Nature-Based Solutions for Your Business January 28th 10am What are nature-based solutions? How can they help your organisation? How do they work, in practice? CarbonStore is well equipped to explain. Through Tilhill, we have 70 years’ experience in planting trees and restoring peatlands. Please join us for our free webinar discussing these issues […]
Green carbon initiatives join forces to expand the UK market
In the race to tackle climate change and to reach net zero emissions, two key UK-wide carbon markets have joined forces. The UK Woodland Carbon Registry and UK Peatland Code have come together to form the new UK Land Carbon Registry. The new registry aims to create a more accessible ‘one-stop-shop’ for woodland and peatland […]
CarbonStore and The Woodland Carbon Code – Webinar Recording
CarbonStore, a company providing an open and transparent platform for companies and landowners to buy and sell Woodland Carbon Units is delighted to share this free public webinar dedicated to farmers, landowners and companies. The online event on November 3rd 2020 introduced CarbonStore and outlined the Woodland Carbon Code. The webinar attracted over 240 guests […]
When considering environmental enhancement, it can sometimes feel as though there are too many variables to juggle or prioritise to make the most significant impact possible with the resources at your disposal.
The intricacies of the Woodland Carbon Code present many potential pitfalls for landowners seeking to capitalise on their newly planted woodland’s carbon sequestration capacity. Some agents/brokers purchase Pending Issuance Units (PIUs) directly from landowners and then hold them, as inventory, while they look for a corporate buyer for the PIUs. (Please note that CarbonStore operates […]
A Unique Carbon-Offsetting Business Launches Today
A new opportunity launches today for those of us seeking to contribute to a cleaner, greener, low carbon economy. CarbonStore will be utilising its unique partnerships to unite landowners, who are looking to sell woodland generated carbon units, with companies that are keen to offset their carbon emissions. The objective being to provide a woodland-based […]
Reducing UK emissions: 2020 Progress Report to Parliament
This is the Committee’s 2020 report to Parliament, assessing progress in reducing UK emissions over the past year. This year, the report includes new advice to the UK Government on securing a green and resilient recovery following the COVID-19 pandemic.
UK Woodland Creation in the Past 12 Months: We Still Have a Lot To Do…
On 11th June, the Forestry Commission gave us our annual insight into tree planting volumes across England, Scotland, Wales and Northern Ireland for the 12 months from 1st April 2019 to 31st March 2020.
Pending Issuance Unit: A promise to deliver a Woodland Carbon Unit during a given period, based on the trees’ predicted growth
Woodland Carbon Unit: A ton of carbon dioxide which has been sequestered in a scheme verified under the Woodland Carbon Code