Benefits to Landowners
Income: New woodlands which meet the standards set out in the UK Woodland Carbon Code could provide an alternative to agricultural income, with sales of carbon units either giving:
- Additional income upfront to help with the establishment of the woodland through the sale of Pending Issuance Units (PIUs). Landowners report selling units to companies for between £10 and £20+ per PIU in the first few years of their projects; a native woodland could generate around 400 units per hectare.
- Future income from the sale of Woodland Carbon Units (WCUs), once the woodland has actually sequestered and stored the carbon from the atmosphere. The value of WCUs is likely to be higher than that for PIUs, but there haven't yet been enough sales of WCUs to provide any price data.
Depending upon how the woodland is managed, and provided the project is additional, there's also the potential of future income from timber products from saw logs to wood fuel. Recent research assesses the investment returns from timber and carbon in woodland creation projects (2017).
Tax-Free Income: Income from commercial forestry is not subject to Income or Corporation Tax. The sale of voluntary carbon credits is outside the scope of VAT. However, you should always seek professional independent advice on your specific circumstances before making any long-term investment decisions.
Credibility and reassurance: Having your project independently validated and verified to the Woodland Carbon Code adds credibility to your project and provides companies wishing to buy carbon units with reassurance about the amount of carbon sequestered in your project. The Woodland Carbon Code is endorsed by ICROA providing greater market trust in the product you are selling. It is also noted as a quality, credible standard in Natural Capital Partners' CarbonNeutral Protocol, PAS2060 - British Standards Institute's standard for carbon neutral claims, as well as in the Green Building Council's Net Zero Carbon Buildings Frameork
The Integrity Council for the Voluntary Carbon Market will be setting out 'Core Carbon Principles' later this year and we will ensure that the UK Woodland Carbon Code meets these principles.
Social and Environmental Benefits: Woodland creation projects are sustainable projects which not only sequester carbon but also provide a range of social and environmental benefits such as:
- Benefits to wildlife and biodiversity
- Opportunities for varied recreation
- Enhance the local landscape or restore degraded landscapes
- Provide shelter for animals or humans depending on location
- Provide a source of wood fuel as an alternative to fossil fuels
- Provide timber which can then also continue to store carbon in long-lasting timber products
- Protect water and soils
- Regulate temperature in urban areas