By Brian Richardson, head of agriculture for Virgin Money

“AS PART of its carbon reduction agenda, the UK Government aims to increase tree planting by 250% by 2024, with a detailed plan for achieving this expected to be published later this year. This comes at a time when tree planting has been accelerating and demand for timber increasing. The positive environmental impact of forestry as a carbon offset is also coming to the fore. Forestry will change the landscape, in more ways than one.

Historically, commercial forestry has been clear in its needs, and focused on specific areas and types of land. As demand increases, more land is being looked at for forestry, both conifer and broadleaf. Undoubtedly, income generation will support some further tree planting and as the environmental agenda takes root there comes an added factor to consider – that of carbon offset value.

There is enthusiastic talk around carbon capture in trees and its potential value, and although still in its early days, there is an emerging market in carbon. In addition to the commercial market, there will be companies looking specifically to invest directly in forestry to offset their own carbon usage, as well as farm units using tree planting to offset their own carbon footprint to meet Net Zero requirements.

At the present time this is pioneering activity, so it is important that landowners and farmers take proper advice from specialists in their field prior to entering into any tree-related carbon agreements.

While care and caution is needed, it seems clear that in the future, forestry will play a much bigger part in the wider farming economy. This will be driven both by demand for timber and its positive role in sequestering carbon.

New agricultural policy will also potentially repurpose land not considered before. More land will be driven into forestry, alongside farmers looking to diversify and repurpose their own farmed area because of location and land type, and enhancing the farms own environmental credentials.

There are already significant planting and maintenance grants for woodland. To meet the ambitious targets for planting, one would expect these to be further bolstered going forward. Forestry needs to be seen as a crop that requires maintenance and ongoing management. Any linkage to carbon will make regular audit and monitoring an even more important requirement.

Farming has always evolved to meet the latest challenges and climate change is no exception. The industry is rightfully at the forefront of the debate as to how to achieve the goal of Net Zero by 2040, and to play a part through its land resource in meeting the wider UK Net Zero goals by 2050. As more information on the Government’s approach emerges, forestry and tree planting will certainly get higher on the climate change agenda.

When considering if forestry has a place on their farm, farmers need to be particularly careful in understanding and managing the carbon credits the trees will generate.

While in recent years we have already seen increases in plantings, the anticipated expansion of forestry will put considerable pressure on resources such as foresters and nursery capacity for tree seedlings. So, those considering expanding or putting their first step onto the forestry farming ladder should take advice and care in choosing the right partners and employ professionals to do the work.

At Virgin Money we are committed towards 5% sustainable lending by FY22, as well as halving carbon emissions generated in loans and investments. We are talking to our farming customers to accelerate their own thinking and plans in this area, and as we look to invest in green projects and funding, we are examining how these address residual carbon. We are happy to discuss both the business impact of forestry on your agricultural business, and the way our green investment agenda can also help your plans going forward.