On 4 November 2019 the Forestry Commission launched the Woodland Carbon Guarantee (WCaG). This allows landowners to enter into a contract to sell verified Woodland Carbon Units (WCU’s) to the government for a guaranteed price to 2055/56. When the initial capital and revenue grants are finished the WCaG provides an ongoing source of income to, and beyond first thinnings.
The WCaG is a £50million scheme that aims to help accelerate woodland planting rates and develop the domestic carbon market.
There are four main steps to the WCaG process.
Registration & Application
Woodland projects have to be registered on to the UK Registry (Markit) first. Once approved, the WCaG application form can be completed.
Auction & Validation
It is important not to start any works (ground prep, fencing, planting) until after the auction and once in receipt of a conditional offer of contract.
Once your application has been accepted, you will be invited to participate in an online auction and the government will bid on WCU’s.
There will be two auctions per year with the first expected in January 2020, followed by a second auction in August 2020. The auctions are expected to run for 4-5 years.
The auction will operate as a simple single-shot sealed bid process and applicants (sellers) provide a price per WCU required to make your woodland creation project viable and worthwhile.
Once the auction closes the bids will be accepted on the basis of price (below the reserve) until the available budget has been committed.
The government will also set a maximum budget for each auction.
If the project is successful at the auction then a conditional 30-35 year contract is offered.
All contracts are conditional at this point on securing validation under the UK Woodland Carbon Code (WCC).
Once the project has been validated as meeting the standards of the WCC, the Forestry Commission will issue the final WCaG contract.
Verification and Sale of Carbon
There is the requirement to verify the project to maintain certification to the Woodland Carbon Code at Year 5 and every 10 years minimum thereafter, for the duration of the project.
This process confirms the amount of carbon that has been sequested and therefore the number of WCU’s generated. The government buys the verified WCU’s for the guaranteed price or you can sell them privately on the open market.
Am I Eligible?
The WCaG is open to land managers, owner occupiers, tenants, landlords and licensors, as long as they have control of the land, and all activities meet the obligations of the WCaG and Carbon Code.
The WCaG application cannot include land:
- covered by a statutory requirement to establish or restock woodland.
- is not entirely within England.
- where the applicant does not have management control for the length of the agreement.
- is owned by public bodies.
WCaG applications can be made alongside existing grant agreements (for example, Countryside Stewardship, the Woodland Carbon Fund or the HS2 Woodland Fund) provided that the agreement was signed after 29 October 2018.
How can Lockhart Garratt help?
Matthew Willetts and Rob Stockley are experts in WCC certification and have a dedicated a considerable amount of time to build up a strong knowledge of the WCaG process, supported by the team at the Forestry Commission.
If you would like to know more, please call Matthew or Rob on 01536 408840.