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Research Note
Richard Haw
Financial returns from woodland creation have traditionally been generated from sales of timber. In recent years, the voluntary carbon market has established and grown in the UK and landowners can now generate additional revenue from the sale of carbon. The sale of carbon ‘credits’ allows landowners to increase their financial returns by creating woodlands for both timber and non-timber objectives. Even at conservative yield classes and low carbon prices, woodlands can generate 400–1300 of extra income per hectare when carbon credits are included, and much more for higher yield classes or carbon prices. The costs and benefits of woodland creation projects can vary significantly. However, this Research Note shows that, based on conservative assumptions for the five woodland types analysed here, the net present value for woodland creation increased by around 40–70% for some projects and enabled other projects to produce positive returns from the inclusion of carbon revenue. The analysis also shows that financial returns from commercial rotations can be increased by selecting a longer rotation length that will sequester more carbon. Even at low carbon prices, the extra carbon revenue generated from increasing the rotation length by five years outweighs the reduction in timber value from delayed harvesting. At higher carbon prices a further increase in rotation length could also be substantiated.
A4 | 8 pages | colour | online only
Stock code:FCRN031

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