The Woodland Carbon Code (WCC), which is a Government scheme aimed at verifying the amount of CO2 captured by new planting, is offering landowners tax-free income as well as more traditional forestry revenues.
According to the WCC, a scheme which captures 30,000 tonnes of CO2 across 100-hectare (247 acre) for over 95 years could bring in between £152,000 and £304,000 in carbon revenue, depending on carbon value at the time. This is currently between £5 and £10 per tonne.
The scheme has been designed to address the UK’s international environmental obligations, as woodland ‘consumes’ CO2, which is harmful to the environment. It works by allowing the owners of woodland to trade ‘credits’ with businesses engaged in industries that produce atmospheric emissions.
Landowners go via local organisers, who estimate how much carbon will be captured during the lifetime of a project. Once this information has been validated, the amount is issued as pending issuance units (PIU). The verified PIUs are then converted to woodland carbon units and used to offset carbon footprints.
Woodland owners can either sell their PIUs upfront and remain tied to delivering target totals over the duration of a scheme, which could be up to 100 years, or sell approved woodland carbon units once verified.
As one registered valuer commented, not only is this a practical and effective way of reducing carbon in the atmosphere but WCC can significantly affect the returns from forestry.
Mike Bagg, Partner at Milsted Langdon, said: “Any measures to further reduce our carbon footprint have to be welcomed in this day and age. This one, particularly, with its tax-free benefits for landowners, is good news for the agricultural sector as a whole.”
For more information about how Milsted Langdon can help, please contact us.