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New Woodland Creation On a Smaller Scale

With both the UK and Scottish Governments’ long term goals to increase woodland and forest cover to help reach climate change targets, it comes as no surprise there are strong financial incentives out there to get trees planted. However, new woodland creation is often seen as something that has to happen on a large scale to be viable, but this is not the case.

There is financial support available in both Scotland and England to allow for new woodland creation on a small scale. Such woods not only serve towards a positive contribution to the environment, help with climate change mitigation and provide enhanced amenity but they also should be considered as a viable option for stabilising future income and spreading risk across an estate or agricultural business.

In Scotland, there is one main grant option for woodland creation - the Forestry Grant Scheme (FGS). It offers various options to support planning, establishment, maintenance and protection of new woodlands. There are options for planting areas as small as 0.25 hectares (Ha).

Running alongside this is the new Future Woodlands Fund (FWF), administered by Future Woodlands Scotland (FWS). Applications for this fund specifically target native woodland creation, or restoration of ‘ghost’ native woodlands in Scotland. It is on offer to woodland creation projects that are between 3 Ha and 100 Ha. The fund offers financial support in the preparation of a FGS application and Project Design Document for validation with the Woodland Carbon Code (WCC). Thereafter, it offers area payments of £100/Ha per annum for 20 years, in exchange for the assignation of verified carbon to FWS, based on a 55 year legal agreement between FWS and the land manager to maintain the woodland. This is a new pilot scheme and should be approached with caution as it does mean the landowner has no legal right to the carbon units produced by the new planting. Thus, the landowner would not realise any financial potential of the carbon units being sequestered, which are very likely to be more financially advantageous than what is being offered by the FWF.

In England, the Countryside Stewardship (CS) Woodland Creation and Maintenance Grant applies to a minimum of 3 Ha (reduced to 1 Ha in certain areas), but this is per application, so can be spread across a farm or estate as long as the individual woodland size is more than 0.5 Ha. Whilst we are dealing with several woodland creation schemes of over 200 Ha in size, we are also dealing with numerous smaller applications. For example, on behalf of a client in Northumberland, Galbraith are currently in the process of applying for CS woodland creation grants on five small areas of land, totalling just over 5 Ha, which are currently used for extensive agricultural grazing. It is worth noting that CS agreements set to start in 2022 will be at no detriment to the new ELMS schemes being introduced. Reassurance has been given to land managers that CS agreements could be ended early in favour of new ELMS agreements.

All of these grants offer financial aid in establishing new woodlands and various maintenance payments after planting. However, that is not all that is available financially. In England, the Woodland Creation Planning Grant (WCPG) provides funding for the work required to ascertain the planting potential of the land and work up a scheme design. The minimum size requirement for this is 5 Ha with the opportunity to access additional funding for survey work if required. We have found this to be a great opportunity to streamline applications for CS Woodland Creation. Galbraith has, for example, submitted an application for a 15 Ha site in Northumberland where additional survey work was required to determine the significance of any archaeological features. The cost of this work might have dissuaded the owner from applying if it had not been covered by the grant. It has allowed us to create a woodland design plan that is sympathetic to the surroundings and thoroughly check any constraints to planting, all whilst removing costs directly from the client to make a relatively small project financially viable.

Even after planning and establishment, there are still more economic benefits to planting small woodlands. In the UK, registering a project with the WCC after planting allows for the owner to sell their carbon units upfront as Pending Issuance Units (PIUs) or at verification stages throughout the lifetime of the project as they are converted to Woodland Carbon Units (WCUs) which can be traded on the developing carbon market. This has further been supported by the Westminster Government with the creation of the Woodland Carbon Guarantee (WCaG) which operates in advance of woodland creation. This allows those intending to plant woodland in England the opportunity to underwrite the future sale value of their WCUs with a Government guarantee of an agreed price decided at reverse auction, but it does not stop a future sale on the open market if better prices can be achieved.

With the financial support of these grants in the planning and establishment of woodlands, coupled with potential income from selling carbon units in the longer term and traditional timber incomes, there is no better time to consider woodland creation. Often small scale planting makes very good sense as part of a mixed farm or estate business.