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The Woodland Carbon Guarantee (WCaG) is a 50 million scheme that aims to help accelerate woodland planting rates and develop the domestic market for woodland carbon for the permanent removal of carbon dioxide from the atmosphere. It is an objective in the 25 Year Environment Plan and was announced in the autumn 2018 Budget.

The Woodland Carbon Guarantee provides you with the option to sell your captured carbon in the form of verified carbon credits, called Woodland Carbon Units (WCUs), to the government for a guaranteed price every 5 or 10 years up to 2055/56. This provides an additional long-term income from your woodland. If you prefer, you can still choose to sell the credits on the open market rather than to the government. WCUs are generated through verification checks carried out under the Woodland Carbon Code, which assess how the woodland has grown and therefore how much carbon dioxide has been captured.

What is on offer?

Unlike most existing woodland creation support mechanisms the WCaG is not a grant or a fund and it does not contribute towards the cost of planning, establishment or early maintenance.

Woodland creation projects accepted into the Woodland Carbon Guarantee have the option to sell WCUs to the government every 5 or 10 years up to 2055/56. The government will buy the WCUs for an agreed guaranteed price that is index-linked for the life of the contract. You can still choose to sell the carbon credits on the open market at any time.

Find out more about the funding on offer in our Woodland Carbon Guarantee leaflet (PDF, 849 KB, 4 pages) and in the more in-depth guide to Getting Started with the Woodland Carbon Guarantee (PDF, 509 KB, 7 pages).

What are the benefits?

The open market price for carbon credits from domestic forests is currently low, meaning that woodland creation projects aimed at long-term carbon sequestration are often unviable, particularly when compared to other land uses and in areas of higher land value.

The Woodland Carbon Guarantee provides long term certainty for participants. It provides landowners with a guaranteed price for the carbon credits, set at the level required to make the investment worthwhile.

The guaranteed price, coupled with the index-linking can significantly reduce the financial risk associated with the long-term investment.

Currently, profits arising from the commercial occupation of woodlands are not chargeable to Income Tax & Corporation Tax and the value attributable to trees is exempt from Capital Gains Tax. The sale of voluntary carbon credits is not currently chargeable to VAT. However, you should always seek professional independent advice based on their specific circumstances before making any long-term investment decisions.

Find out if you are eligible

The WCaG is open to land managers who are owner occupiers, tenants, landlords and licensors, as long as they have control of the land and all the activities needed to meet the obligations of the WCaG for the full duration of the contract.

The WCaG application cannot include land:

• which is covered by a statutory requirement to establish or restock woodland
• which is not entirely within England
• where the applicant does not have management control for the length of the agreement and is unable to have an application countersigned by the landowner
• which is owned by public bodies

In order to apply for the Woodland Carbon Guarantee, woodland creation projects will need to be registered with and managed under the Woodland Carbon Code.

For further information see the section on Eligibility Criteria

How to apply

The next Woodland Carbon Guarantee auction will take place from midday on Monday 21 November to midday on Sunday 27 November 2022. The application deadline to take part in the auction in 23:59pm on Sunday 6 November. The budget available for the auction will be 10m.

In order to apply you must first register your project with the Woodland Carbon Code.

If you have registered for the Woodland Carbon Code and meet the other eligibility requirements, please complete the Woodland Carbon Guarantee application form and return it to:

wcag@forestrycommission.gov.uk

You can get further advice on WCaG or help completing the application form from the Forestry Commission by emailing wcag@forestrycommission.gov.uk or by calling our WCaG enquiry line: 0300 067 4822.

How it works

There are 5 stages to the Woodland Carbon Guarantee process. Please see Getting Started with the Woodland Carbon Guarantee (PDF, 509 KB, 7 pages) for further information.

1 - Pre-application

The WCaG is restricted to new woodlands and the best time to start thinking about incorporating carbon income into a project is during the early planning stage. The WCaG process allows for the design of the woodland to be modified after an application has been approved, so it is not necessary to wait until all of the planning and EIA processes are complete before applying for the WCaG. In fact, applying early for WCaG can be helpful to understand whether a project will be financially viable before committing time and effort to the detailed design processes. Before applying for WCaG, you will need to:

1. Identify land for planting. WCaG applications must be linked to a specific project and areas of land, so a first step is to identify the fields or land on which you wish to create your woodland.
2. Decide what you will plant. Applying for WCaG doesnt require a final woodland design plan but it does require you to have a reasonable idea of the type of woodland that you wish to establish and how it will be managed (for example, thin or no-thin, or clear-fell or continuous cover) in order to calculate how much carbon it will sequester.
3. Calculate how much carbon the woodland will sequester. The Woodland Carbon Code provides tools for calculating how much carbon could be sequestered by your woodland. You can download the Carbon Calculation Spreadsheet and Guidance from the Woodland Carbon Code website.

2 - Application

Once you are satisfied that a project is viable and worth pursuing, you will need to register it with the Woodland Carbon Code. You can do this through the Woodland Carbon Code website. It is also worth considering if you want a project developer, who is experienced in carbon projects and who will already have an account on the Registry, to help you through this process. A developer may also be able to group your project with other landowners to save money on validation and verification costs. 