What price will landowners put on carbon captured by planting new trees?
PUBLISHED: 13:38 10 January 2020 | UPDATED: 14:19 10 January 2020
Archant Norfolk Photographic © 2015
Farmers and land managers can help set the market value of carbon capture in a "reverse auction" of government incentives to encourage the planting of more trees.
The Woodland Carbon Guarantee is a £50m scheme launched by Defra last year, offering a long-term financial income in return for the environmental benefit of carbon sequestration, achieved by new woodland creation.
Land managers will be able to sell "carbon credits" to the government every five or ten years until beyond 2050, for a guaranteed price. The price for which the credits can be sold will be decided through a reverse auction - in which sellers bid for the prices at which they are willing to sell, rather than the traditional auction process where buyers place bids to secure a purchase.
Lottie Hill is an agri-environmental consultant in the Norwich office of Brown and Co, a rural agency which is working with industry stakeholders to help shape new "natural capital" initiatives, and advising farmers and rural landowners how to take advantage of them.
"This first auction provides an exciting opportunity to see how people are valuing carbon," she said. "It is expected that the scheme will have £10m available for the first auction. Due to many holding off to see where the carbon price lands, there is a chance secure a higher price for carbon in this initial auction.
"If successful, there is also no obligation until the point of contract signing, leaving plenty of time to assess whether to commit to the scheme. Furthermore, it is worth noting that if the traded market carbon price rises in the future, then any higher market price can be accepted instead of the guaranteed price previously agreed through the reverse auction."
"The scheme is open for new woodland plantings only, with no size being too small, allowing anyone to be involved. In order to support woodland creation land managers may apply for the scheme alongside other existing woodland creation grant schemes, however, these do have a minimum contract size of three hectares."
The first auction is scheduled to take place between January 20-31, with the closing date for registration on Friday, January 17 - leaving only a week left to register.