Private finance sources funding nature restoration locally
Summary: The current private finance mechanisms supporting nature restoration in the New Forest National Park Authority are Biodiversity Net Gain (BNG), nutrient neutrality requirements and the Woodland Carbon Code (WCC).
The Woodland Carbon Code funding woodland creation
Overview
Private finance is available for woodland creation via the Woodland Carbon Code which can provide an additional income for landowners, via the sale of carbon units. Projects conducted in accordance with the Woodland Carbon Code (WCC) provide companies wishing to buy carbon units with reassurance about the amount of carbon sequestered. All information on the Woodland Carbon Code can be found here: Landowners – Apply – UK Woodland Carbon Code
How does the process work?
- Find a project developer – A range of organisations including private forestry companies, land agents and charities such as the Woodland Trust are available to help landowners develop Woodland Carbon projects and prepare the documentation for validation/verification.
- Register your project – Create an account on the UK Land Carbon Registry and register your project. Register your project – UK Woodland Carbon Code. Please note woodland creation projects need to be registered with the WCC before planting begins in order for carbon funding to be accessed.
- Validation – This is the initial evaluation of your project or group against the requirements of the Woodland Carbon Code. For this stage, you need to prepare a Project Design Document.
- Verification – This is the ongoing evaluation of your project or group against the requirements of the Woodland Carbon Code, confirming the actual carbon sequestered. For this stage, you need to monitor your woodland and prepare a Project Progress Report.
Eligibility
- You’ll need to prove your land has not been wooded in the last 25 years.
- All WCC projects have to comply with the The UK Forestry Standard which stipulates a minimum stocking of 1100 stems per hectare
- Permission from the freeholder is required.
- Proposed planting has to pass both a legal test and investment test to demonstrate additionality. Planting must not be legally required (for example, proposed planting cannot be compensatory planting for deforestation project).The project must also demonstrate it would not have made financial sense in the absence of carbon finance.
- You may incur costs towards the creation, establishment and management of the new woodland, however the England Woodland Creation Offer (EWCO) provides grant support towards this (capped at £8,500 per gross hectare)).
Finance
Sales of carbon units give:
- Additional income upfront to help with the establishment of the woodland through the sale of Pending Issuance Units (PIUs). Landowners report selling units to companies for between £10 and £20+ per PIU in the first few years of their projects; a native woodland could generate around 400 units per hectare.
- Future income from the sale of Woodland Carbon Units (WCUs), once the woodland has actually sequestered and stored the carbon away from the atmosphere. The value of WCUs is likely to be higher than that for PIUs, but there haven’t yet been enough sales of WCUs to provide any price data.
Further information
Please visit the Woodland Carbon Code website.
Biodiversity Net Gain (BNG) funding biodiversity enhancements
Overview
Biodiversity Net Gain (BNG) is another mechanism that can, under certain circumstances, provide land managers with funding to undertake nature restoration activities which provide measurable biodiversity gains on their land.
How does the process work?
Through the Environment Act, a minimum of 10% BNG is to be a mandatory requirement of planning permission. It is expected this requirement will be in place from winter 2023 onwards. Delivery is expected within the development site in the first instance. However, where this cannot be achieved on site, developers may purchase credits for a BNG offsetting site and these credits may be paid to land managers who are undertaking restoration activities, which provide measurable biodiversity benefits to their existing land use, to both compensate for any losses elsewhere and provide the level of net gain.
Eligibility
- Demonstrable uplift in biodiversity using the Defra BNG metric 3.1
- The biodiversity created must be additional – BNG measures should be over and above those put in to address other policy or legislative requirements on a specific parcel of land; ensuring that landowners produce a benefit that would not have happened otherwise.
Finance
Biodiversity unit (BU) sale value ranges widely, reportedly anywhere between £9k – £26k. For illustrative purposes, converting one hectare of arable land to neutral grassland habitat could generate biodiversity units worth £48k in revenue with a 30-year agreement. This figure is highly site and habitat specific and will be bespoke to each agreement. The exact price paid is agreed on case-by-case basis between the buyer and seller.
Further information
New Forest District Council seeks to achieve a minimum of 10% biodiversity net gain as a requirement of planning permission for ‘major’ new build development and is interested in landowners and other interested parties who have proposals for projects within the district. Find out more about the call for BNG and nutrient mitigation projects.
Nitrate neutrality requirements funding water quality improvements
Overview
Development proposals draining into both the River Avon catchment and the Solent catchment must demonstrate nutrient neutrality.
Excessive nutrients (principally nitrogen) in the Solent’s European sites are causing eutrophication, leading to an increase in algae growth and this has an adverse impact on the habitats and species within the European nature conservation designations sites in and around the Solent.
How does the process work?
The obligations on developers to ensure planning proposals are nutrient neutral offers an opportunity for landowners to derive payments for creating nutrient mitigation solutions. These solutions are created by converting agricultural land with higher nitrogen loading to alternative, lower nitrogen loading uses such as woodlands and more extensive agricultural methods, as well as creating wetlands that remove nitrogen by processes such as sedimentation and denitrification.
Eligibility
- Land must be in an area where nutrient neutrality rules apply
- To access the nitrate offsetting market land must either be an input source of the nutrients e.g. applying fertilisers, or in a strategic location for the removal of nutrients from a watercourse e.g. via the creation of wetlands.
Finance
Locally, nitrate credits (kg TN) are being sold for around £3k to £4k related to activities lowering nitrogen loading on land. Based on typical figures, one hectare of land could fetch £87k (a one-off payment for 80+ years contract) however this must be caveated given estimates are location and project design specific and must be assessed using the Natural England methodology. The exact sale price is agreed on case-by-case basis between the buyer and seller.
Further information
- Nutrient mitigation – New Forest National Park Authority (newforestnpa.gov.uk)
- Partnership for South Hampshire provides a platform for mitigation providers to feature their solutions.
- Opportunity specific to landholders in the Test and Itchen River Catchments: A DEFRA-funded project is testing the use of an online nutrient trading platform. It will work with landholders within the Test and Itchen River Catchments to facilitate the creation and sale of Environmental Services. The market will focus on creating Nitrogen and Phosphorus Credits alongside Biodiversity Units, to be sold as mitigation for development. The pilot is currently at the non-binding ‘Expression of Interest’ stage for landholders. If this is something that might be of interest to you, please visit Solent Nutrient Market to find out more.
