Carbon markets are growing, and they must do so quickly if we are to meet global targets to cut man-made greenhouse gas emissions over the coming decade. The former Bank of England Governor Mark Carney, who has been tasked with leading a global taskforce on scaling voluntary carbon markets, has estimated that we need at least a 15 fold expansion in order to cut emissions in half by 2030. This rate of growth, if it is achieved, will create huge demand and, with that, there will be opportunities for anyone who can generate verifiable carbon credits and bring them to the market.
Currently, the UK voluntary carbon market is dominated by woodland carbon schemes. The Government-backed Woodland Carbon Code is the most widely used voluntary standard for woodland carbon projects. The code has strict eligibility criteria, for example, planting must be on land that has not been wooded in the last 25 years, and a rigorous verification process. It calculates and verifies the number of carbon credits that a woodland creation project generates so that they can be marketed to private companies. Many landowners chose to sell their credits via brokers, but it is possible to secure sales directly.
Woodland carbon trading is not just for larger forestry projects, smaller planting schemes are eligible, but it may be more cost effective to work together with other smaller schemes to register your projects as a group, to allow you to share the costs of registration and verification.
Another growing slice of the carbon offsetting market is peatland restoration schemes. Peatland is a hugely important carbon ‘sink’ – it stores carbon, and healthy peat that is laying down fresh peat also sequesters carbon from the atmosphere. In contrast, peatlands that are degrading can emit carbon at a frightening rate. Restoring peatlands to good condition can therefore generate carbon credits, and the income from selling carbon to the private sector could provide a much-needed funding injection for expensive restoration works.
The UK Peatland Code operates in a very similar way to the Woodland Carbon Code, providing a standard method for calculating carbon sequestration from peatland restoration and gives buyers peace of mind that projects have been properly verified. We also know that ELM Landscape Recovery schemes will support peatland restoration and will allow ‘blended finance’, so that work can be supported by public funding and take advantage of private finance at the same time. Whereas in the past landowners were lucky to secure funding to cover their costs for peatland projects, in the future peatland restoration, could be a revenue generator.
As well as these more established carbon offsetting schemes, we are also seeing increasing interest in carbon offsetting and trading opportunities on farmland. Though the agricultural industry is a net emitter of greenhouse gases, most farms sequester carbon as well as emitting it. By taking steps to cut their emissions and/or increase sequestration via soils, hedgerows or trees, it is possible for farmers to achieve significant, measurable changes in their carbon accounts which could then be used to generate and sell carbon credits.
Soil management is one area that holds great potential as increasing organic matter in the soil sequesters and stores carbon. According to the farm carbon toolkit, every hectare of land that raises its soil organic matter levels by just 0.1% will sequester 8.9 tonnes of CO2 per year. Today, there is no UK ‘carbon code’ to provide a common way of measuring, validating or marketing carbon credits from soils, but it will not be far away. In the meantime, farmers and landowners should start to look into carbon accounting for their holding and measure their soil organic matter, so that if and when the Soil Carbon Code arrives, they at least have a good understanding of their starting position.