The benefits of woodland creation:creation Woods and Carbon

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The benefits of woodland creation:creation Woods and Carbon

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How benefitswoodland creation can help

Creating new woodlands is a proven way to help tackle the effects of climate change – they act as a natural ‘carbon sink’. Trees do this through the process of photosynthesis, in which leaves absorb atmospheric carbon dioxide and release oxygen whilst locking up carbon. Some carbon enters the woodland creation:soil Woodsthrough fallen leaves and is stored in the long-term, helping to form the tree’s roots, trunk, branches and leaves – this process is known as carbon sequestration. However, planting a new woodland isn’t just good for the planet – it could help your business too.

Growing a woodland could make you an income from selling official carbon units, or, with increasing demand for net zero supply chains, by helping to offset your own business’ emissions. To sell carbon units, you must register and validate your woodland and its potential carbon capture with the Woodland Carbon Code before you have planted it.

Trees sequester carbon at different rates

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Conifer trees normally grow faster in their early life and therefore absorb more carbon dioxide earlier, when compared to native broadleaf woodlands. However, broadleaf woodland can store larger amounts of carbon in the long run. The same can be said when managing a woodland to provide continuous canopy cover – whereby the forest canopy is maintained without clear felling – resulting in larger amounts of carbon storage. Young, fast-growing trees will capture carbon dioxide at a quicker rate, while mature trees can act as carbon stores for hundreds of years. Appropriate tree species and woodland management techniques are needed to realise these carbon benefits.

You must register your woodland creation project with the WCC before planting trees. For a new woodland creation project to be validated with the WCC, it must pass associated additionality tests – to ensure the project would not have gone ahead without funding from carbon offsetting, or the desire to make income from that source. More information can be found on additionality by visiting: Woodland Carbon Code page.

Why act now?

Never has there been a more important time to plant new woodland to help tackle the climate emergency. By planting more trees, and protecting existing woodland, together, we can help counteract some of the harmful effects of greenhouse gas emissions. Financial support and expert advice are available now to support your woodland creation goals.

For guidance on woodland creation and information on grants and available support, visit: woodland creation overview.

How the Woodland Carbon Code can benefit you

New woodland creation projects which meet WCC standards could provide an alternative income stream in two ways:

• through the sale of Pending Issuance Units (PIUs) – an estimate of the future carbon dioxide the woodland will capture once the trees have grown. This can generate upfront income to help with the establishment of woodland. Farmers and landowners can sell PIUs to companies as soon as their woodland creation project is validated. This would enable companies purchasing woodland carbon PIUs to state they are ‘working towards’ becoming carbon neutral as they are a promise of future carbon sequestration.

• alternatively, farmers and landowners can wait until the woodland has sequestered carbon to sell as verified Woodland Carbon Units (WCUs), the value of which is likely to be higher compared to PIUs as they allow companies to state their carbon neutrality.

PIUs convert into WCUs at a certain point in time, once the ‘promise’ of future carbon has been verified as converted into actual carbon storage.

Depending on your wider woodland objectives, timber for production and woodfuel can generate additional income if woodlands are actively managed.

Further savings can be gained from commercial forestry as it is not subject to Income or Corporation Tax, and the sale of voluntary carbon credits is outside the scope of VAT. We would recommend that you seek professional independent tax advice before making any long-term decisions.

A woodland creation project validated and verified by the WCC reassures companies buying carbon units that the project is credible. The WCC is also endorsed by the International Carbon Reduction & Offset Alliance, providing greater market trust which can result in companies paying higher prices for both PIUs and WCUs.

How much income can be generated from selling carbon units?

Woodland creation projects can generate a healthy return with carbon prices ranging from £10 to £30+ per unit. Projects can produce anywhere from 100 units/ha to over 500 units/ha over 100 years, which can generate £1,000/ha to £15,000+/ha through the sale of carbon units via the WCC over the same time period. There are costs associated with using a broker or project developer to manage your woodland project. Find out how to sell your carbon units by visiting UK Woodland Carbon Code page.

Factors that can affect carbon unit prices include:

• the ‘vintage’ of a carbon offset can influence how much companies are willing to pay for carbon units. Each PIU has a serial number attributed to it, to refer to the year in which that PIU will convert or is predicted to convert to a WCU. A WCU predicted to convert in the same timeframe as a company looking to offset their carbon emissions may be considered more valuable to them than one that is not. Typically, the further away the vintage year is, the cheaper the price per credit. As companies are looking to offset their carbon emissions sooner rather than later, it is likely that they will want to buy PIUs that ‘mature’ into WCUs when they need them and not decades from now

• location – some businesses looking to purchase carbon units value getting involved in the project themselves, so may be willing to pay more if the project is located near to their offices

• the nature of the project – some companies prefer mixed broadleaf projects, while others may favour productive woodland projects, for instance if they have timber production in their supply chains

• flexibility – providing public access to the woodland can increase the price companies are willing to pay for carbon units.

• the stage of the project – some companies prefer to buy before planting, while others may prefer to buy ‘off the shelf’ carbon units later down the line

• associated benefits – using the WCC’s Woodland Benefits Tool, a project can be ranked (out of five) for each of the following four categories: wildlife, community, water, and the economy. A woodland project boasting higher associated benefits to environmental services can therefore expect a higher carbon unit price

The sale of PIUs and WCUs can take place at the same time and can include a mix of the two. They can be sold any time and to any company looking to offset UK carbon emissions.

England Woodland Creation Offer

Our flagship England Woodland Creation Offer supports new woodland creation by covering standard capital costs up to £8,500/ha, providing annual maintenance costs of £300/ha for 10 years, with additional contributions available up to £8,000/ha when delivering wider benefits to society, nature recovery, and the environment. Applicants can also retain Basic Payment Scheme payments and receive a contribution towards the costs of access infrastructure.

How to generate carbon units through the Woodland Carbon Code

Before planting trees, you must register your woodland creation project with the WCC. Thereafter, you can follow the steps laid out by the WCC to generate carbon units. Within 3 years the woodland must be validated to generate and list PIUs. A validation assessment is needed in year five and again by year fifteen to convert PIUs to WCUs. The WCC provides guidance on how to validate and verify your woodland project – the Organic Farmers and Growers or Soil Association are both accredited by the UK Accreditation Service to provide this independent service for Woodland Carbon Code projects.

The Woodland Carbon Guarantee