Policy Paper: The Carbon Credit Price and National Tree Planting Impact of Woodland Carbon Code Admittance to the UK-ETS

Foresight Sustainable Forestry Company Plc ("FSF") has collaborated with King's College London and Imperial College Business School on a policy paper, looking at voluntary carbon credits and the opportunity that would be created by admitting Woodland Carbon Code (“WCC”) credits into the regulated UK Emissions Trading Scheme (“UK-ETS”) for carbon.

Headline Research Findings

This Executive Summary presents the findings and recommendations from a UK voluntary carbon market (“VCM”) policy paper in the context of the UK Woodland Carbon Code (“WCC”) and the UK ETS as an appropriate long-term market for high-quality nature-based greenhouse gas removals (“GGRs”). Summary findings from “The Carbon Credit Price and National Tree Planting Impact of Woodland Carbon Code Admittance to the UK-ETS” are as follows:

• Low voluntary carbon credit prices are the key economic reason why the UK is so far behind in achieving its national tree planting targets (i.e. less than half and not exceeding 14k hectares out of an annual 30k hectare tree planting target).
• At current voluntary carbon credit prices, only just over half of the total UK area with commercial afforestation potential, is currently considered economically viable (or ‘unlocked’) for afforestation (i.e. where land’s current afforestation value is higher than its agricultural value), although there are significant variations by nation, with the situation in England and Wales, significantly worse versus Scotland.
• Without a significant increase to WCC voluntary carbon credit prices, it is highly unlikely that the UK will achieve its national tree planting targets by 2050.
• The policy paper recommends admitting WCC carbon credits into the UK-ETS, which it finds could immediately increase the price of these credits by 46-67%, which would economically unlock an additional 11% to 26% of total afforestable land in the UK, representing c.43k-107k hectares of land, and take the UK much closer to achieving its national tree planting ambitions.
• The paper finds that 7.5-19m tonnes of atmospheric carbon dioxide, or equivalent, could be additionally and permanently sequestered as a result of WCC admittance into the UK ETS.
• The paper estimates the amount of land suitable for commercial forestation that could be unlocked if the WCC is admitted to the UK ETS. It does not consider how much additional purely broadleaf-focused afforestation land could also be unlocked as a result of admittance, and therefore the estimated positive impacts on additional UK tree planting and carbon sequestration reported are highly conservative.

Read the full Executive Summary here.

The full policy paper can be accessed here.

The factsheet can be accessed here.