(L) Don Macleod (R) Margi Campbell
Acting on mounting ecological concerns, especially over climate change, landowners are signing up to ‘carbon codes’ that reward responsible restoration, protection and use of natural assets such as woodland, peat, soil and waterland.
Regimes such as the Woodland Carbon Code (WCC), helped by wider understanding of the issues, are gaining acceptance as a means to encourage invesment in natural capital, 70 guests heard at ‘Are we on the Road to Net Zero?’, an event co-hosted by Galbraith, the law firm Turcan Connell and the accountants Saffery Champness.
Trees take many years to sequester (capture, remove and store) carbon dioxide, one of the key causes of global warming. Meanwhile, businesses are keen to ‘buy’ into the ability to sequester carbon, to fulfil their climate obligations by offsetting their emission-producing activities.
Because landowners planting trees require more immediate revenue from their land, the WCC issues landowners with pending issuance units (PIUs) soon after trees are planted, offering landowners the opportunity to generate income from their woodland creation.
Producers need to understand their own carbon footprint to sell carbon with confidence, as their access to markets will depend on their ability to show progress towards net zero.
“Management practices must evolve to improve the quality of our natural environment,” said Ian Hope, Head of Rural at Galbraith, which has introduced the Atlas. This is a natural capital report based on specialist research and tailored to guide estate owners and managers through carbon-related opportunities and challenges.
Don Macleod, a Turcan Connell partner specialising in rural matters, said a new model was emerging, defining risks and responsibilities, to guide landowners and others. “There’s still a lot of uncertainty, but we’re learning, and can start to weigh the risks,” he said.
Margi Campbell, a partner at Saffery Champness, said HMRC guidance on woodland taxation was lacking and establishing facts was crucial. “When someone asks, ‘Am I liable for tax on this activity?’ the answer is usually, ‘It depends’.”
The treatment of VAT is also an area of uncertainty as in some cases there is a supply of neither goods nor services.
- Natural Capital: Galbraith’s expert advisers guide our clients in realising value in all land uses – by assessing and measuring natural assets, furthering opportunities in biodiversity net gain, and ensuring stakeholders are rewarded fully for their investment in and contribution to delivering ecosystem services and net-zero outcomes.