In June we wrote about an ongoing consultation relating to the latest version of the Woodland Carbon Code. The consultation closed on 10 June 2025 and version 3.0 of the Code was published on 1 August.
32 responses were received from stakeholders and Scottish Forestry have published a summary of those along with their own responses which reflect the production of a new version of the Code that broadly aligns with the initial proposals . Several of the updates to the previous version 2.2 are designed to provide greater clarity to project developers and other stakeholders, and this includes clarification around what is guidance and what is a requirement in relation to design and implementation of woodland creation projects.
One notable change is the increase in the minimum period for a code project to 40 years. Version 3.0 retains reference to a minimum term equivalent to the shortest clearfell rotation, which can be longer than 40 years.
Concerns remain within the sector that the costs of participation remain prohibitively high for smaller projects and these concerns are to an extent recognised in the consultation response. Scottish Forestry have committed to production of new and streamlined project documents and templates dealing with project design, project progress reports, commitment statement and survey plans. The threshold for small woods projects (with less stringent monitoring requirements) has also been increased from five hectares to 10 hectares. The response also noted that Scottish Forestry are piloting the use of drones and allowing other projects to utilise satellite data, all with a view to reducing the cost of validation and verification.
Project participants are increasingly interested in the potential to measure and monetise the biodiversity enhancements that are achieved by many woodland creation projects. 60% of respondents agreed or strongly agreed with the proposal to allow Woodland Carbon Code projects to monitor biodiversity baseline. Scottish Forestry have committed to piloting the option of monitoring of biodiversity baseline so that feasibility and implications can be further understood. It is hoped that this pilot will improve market understanding and readiness for future nature markets. It is worth noting however that Scottish Forestry are not committing at this stage to production of separate biodiversity credits as part of the Woodland Carbon Code.
Following the themes of accessibility and streamlining, changes have been made to the requirements for group agreements. Whereas it was anticipated that groups might be used as a means of pooling carbon risk and reward amongst various landowners, in practice groups have more commonly been used as a way to share validation and verification administration costs, with each landowner retaining responsibility for delivery of carbon units on their own land. As such, and with a view to cutting unnecessary layers of paperwork, the requirement for a group agreement has been dropped where there is no pooling of carbon. Going forward, where there is pooling of carbon (or where carbon is pooled across several landowners in a common grazing project), there will be a requirement to provide a multi-party carbon sharing agreement.
Stakeholders have been expressing concern for some time that the financial data used under version 2.2 is out of date, with the result that calculations were providing an inaccurate reflection of a project's additionality. The updating of the financial cashflow data will therefore be welcomed by the sector, as will the commitment to annual review and updating. The cashflow calculations for each project will also be made publicly available. However the data that project developers need to use for their calculations will still be standardised rather than project specific; we understand that this is largely due to the practicalities of utilising project specific data.
The carbon calculation model (which determines unit numbers for each project) has also been updated to reflect data available on establishment emissions and to recognise future natural regeneration. Projects that have already been validated under the previous version of the Code can update to the new calculator for future verifications.
The consultation summary included a plan to update the standard and documents every three years, recognising that this is an evolving sector that can hopefully develop use of technology and build on experience in a way that will improve efficiencies and maximise participation whilst maintaining the integrity of the Woodland Carbon Code. Scottish Forestry also took the opportunity to seek stakeholder views on topics that would merit future work and on order of priority. These topics are largely focussed on reducing cost, further improving and expanding the reach of the carbon calculation models. There is a recognition of the need to review buffer rules and to look at models for increasing demand and creating markets for pending issuance units and carbon units.
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