Crofting: national development plan

Additional Carbon Income for New Woodlands and Peatland Restoration

Where the income from the woodland creation or peatland restoration grant is insufficient to make the project viable, it may be possible to generate extra income from selling carbon units from the project. In order to be able to sell carbon units the project needs to be validated and verified to the relevant standard and appear on the UK Land Carbon Registry. These standards are contained within the Woodland Carbon Code^[32], (managed by Scottish Forestry for carbon sequestration in new woodlands), and the Peatland Code^[33], (managed by the International Union for Conservation of Nature UK Peatland Programme, for emissions reduction due to peatland restoration).

What are the Woodland Carbon Code and the Peatland Code?

Excessive emission of greenhouse gases such as carbon dioxide (CO2) are causing damaging climate change. Planting woodland to remove CO2 from the atmosphere, known as woodland carbon capture, is a cost-effective way of compensating for emissions while also providing many other social, environmental and financial benefits. Healthy peatlands store large amounts of carbon, but when degraded they emit CO2. Restoring peatlands reduces greenhouse gas emissions to the atmosphere from peat carbon stores. Over time, the conditions for peat formation turn a source of emissions into a sink.

People who wish to invest in carbon projects need to feel confident that the new woodlands and peatland restoration projects will be well managed and will realise the carbon capture or emission reduction claimed. Independent validation and verification to the Woodland Carbon Code or the Peatland Code provides assurances and clarity for buyers with regards to the quantity and quality of emissions reduction purchased.

• A new native woodland might generate 400t CO2 / carbon units per hectare over 100 years, and carbon units are currently selling, as at November 2020, for between £7 and £20 per unit. As at December 2020, there were almost 270 projects in Scotland registered with the Woodland Carbon Code.
• A peatland restoration project where 10% of the area was actively eroding and 90% was drained before restoration, might generate almost 300t CO2 / emissions reduction units per hectare over 100 years. As at November 2020, there are 24 projects across the UK registered with the Peatland Code.

Interest from landowners and tenants (including crofters) and companies looking to purchase carbon units has increased rapidly over the last 12 months. For small projects, working together as a 'group' for validation and verification makes the third party checking process much more cost effective. There is a growing number of companies acting as 'project developers' for land managers, who will help with the validation / verification process and the sale of carbon credits as well as 'brokers' who are looking to buy carbon units on behalf of their corporate clients. Scottish Forestry can help signpost companies offering these services.

Other potential income streams

Woodlands and peatlands offer a wide range of ecosystem services benefits, such as improved water quality, reduced flood risk and improved air quality. Some initiatives are starting to find ways to reward land managers for delivering these benefits. These approaches may provide opportunities in the future for crofters to work with local stakeholders and businesses to develop revenue streams for a wide range of benefits their land provides.

Case Study

Lynn Cassells and Sandra Baer

Lynn Cassells and Sandra Baer of Lynbreck Croft, Grantown on Spey, are creating 15 hectares (net) of mixed native woodland generating over 3,500 tCO2 in carbon credits which has been sold upfront to Allstar Ecopoint via Forest Carbon. This extra income made woodland creation on the croft viable, allowing trees to play a vital part in the livestock system on this high nature value enterprise, and helping to create a wildlife corridor between Abernethy and Revack Estate woodlands.

Keith MacDonald of Trumisgarry Croft, North Uist, has created 2.6 hectares (net) of native woodland with 20% Lodgepole pine, generating 800t CO2 in carbon credits which have been sold to Confused.com. The extra income made the woodland creation viable and creates shelter for livestock on the croft. Keith wanted to add to the biodiversity in this highly exposed location where tree cover is very scarce, and better utilise their croft land.

The Scottish Government, Scottish Forestry and the IUCN UK Peatland Programme, will continue to promote the Woodland Carbon Code and Peatland Code to provide opportunities for private sector funding to make more woodland creation and peatland restoration projects viable – for all landowners including crofters.