Established in 2020, the Forest Canopy Foundation is a not-for-profit organisation driving to increase woodland creation at scale across England. Carolyne Locher spoke to co-founder Niel Nicholson to find out more about its aims and what steps are being taken to achieve them.
UNPRECEDENTED times of change offer the chance to think differently. Why think small, when myriad environmental and economic challenges demand something far larger? One private forestry sector collaboration is moving in this direction.
In its simplest form, the Forest Canopy Foundation (FCF) provides connections between the private forestry sector, landowners and the ‘blended finance’ needed to “get as many trees in the ground as possible,” according to Niel Nicholson, speaking over Zoom from a well-lit room in Oxfordshire.
Niel is financial director of Nicholsons, a landscaping, forestry management and nursery business established in 1979. Employing 150 staff, with 20 full-time and many more contractors in their forestry department alone, in 2019, Nicholsons was named Oxfordshire Large Business of the Year.
Having launched this collaborative initiative at the CLA Forestry Conference in October 2020, it is hoped that the first FCF tree-planting schemes will get underway in the winter of 2021/22.
The initiative is not a new idea. Co-founders Niel, Graham Taylor (Pryor & Rickett Silviculture) and Justin Mumford (Lockhart Garratt) have for years shared their concerns that increased tree planting is not happening.
“Woodland creation at scale needs extra external investment (funding), because the current grants are not enough,” said Niel. “There is a lot of interest in ‘Carbon Zero’ and companies are looking to offset. If they came to us individually with any sizeable sum of money we could not accommodate it because, individually, our businesses are too small.
“The private forestry sector being based mainly on companies that are small to medium in size, any sizeable investment needs go to through an entity.”
In January 2020, FCF approached the Woodland Trust. The charity was interested in working with others, as long as – given their charitable objectives – it was on ‘native’ woodland creation. WT has since partnered with Lloyds Bank, whose investment of £30 million will fund the planting of 10 million trees.
Niel said: “For climate change and resilience we wanted to be able to look beyond the palette of native species and incorporate commercial trees (in the right place) as we import over 80 per cent of our timber.”
Just before the first lockdown, at a meeting with six like-minded forestry professionals, they “decided to go it alone” and set up the Forest Canopy Foundation.
Registered with Companies House, the not-for-profit FCF has five board members: Niel Nicholson, Liz Nicholson (soil scientist and managing director of Nicholsons), Justin Mumford, Graham Taylor and Ed Milbank (Pennine Forestry).
To ensure complete transparency, Grown in Britain (GiB, a not-for-profit forestry certification body) sits sandwiched between the FCF umbrella and on-the-ground ‘delivery partners’ as an independent auditor. Before they join, GiB audits all potential delivery partners and they will verify all woodland creation schemes brought under FCF’s umbrella.
“I see FCF as a three-way brokerage,” said Niel. “You have the private sector forestry companies. We are open to any of them, and every small to medium-sized forestry business can join as long as they agree to play by the rules. Then you have the landowners. We all have contacts in the landowning fraternity (CLA and beyond) interested in tree planting. When we can show that the numbers stack up financially, I think we will see a lot of interest. The third brokerage is made up by the corporate companies who want to offset their CO2 emissions (those that they cannot reduce). Many do not know where to go.”
Niel illustrated how the brokerage works. If Nicholsons brings a project to the FCF, they deliver it. If a delivery partner has a landowner that wants to plant but needs money to finance a scheme, the FCF sources corporate help, but it remains the delivery partner’s project.
“If a landowner or a corporate comes to us wanting to do some planting in Surrey, we open it up to the nearest two or three partners who then put in quotes,” said Neil. “We are not a cartel. We are trying to be fair. We are not for profit, so (to a point) we have to be transparent with costings, which may vary depending on the site, the client and more.”
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To reiterate, on-the-ground delivery partner membership is open to every small-to-medium forestry sector business, chartered and non-chartered foresters alike. There is a membership fee, which Niel says “is minimal” and the FCF charges a levy on carbon income to cover its own costs. Niel said: “We want to be able to offer nationwide coverage for projects, so if someone comes to us with a lot of money, we can do it.”
The rules governing woodland creation schemes brought under the FCF banner are:
- they must fulfill the landowner’s objectives
- they must fulfill a set of GiB-developed metrics (‘Carbon Plus’ planting schemes)
- they must be covered by a 25-year management contract (vital for sites with squirrels).
“We are not just planting commercial trees,” said Niel. “We require a lot more, not just for carbon, but for biodiversity, habitat connectivity, water, air quality and the public. By Year 25, most woodlands are fairly self-sufficient and should start to break even with money realised from thinnings.”
Persuading landowners is crucial. In lowland England, land values generally decrease when trees are planted on farmland. A loss of farming income (and annualised farm payments) coupled with tree planting and 25 years’ worth of management costs can make woodland creation appear unviable.
In a few years’ time, Environmental Land Management Scheme (ELMS) payments (public money for public goods) may make woodland creation financially palatable. Until then, hopes are pinned on ‘blended finance’, a mix of grants and corporate funding for carbon offsets (carbon funding), to fill the funding gap.
On the voluntary market, Woodland Carbon Units fetch between £6 to £15 per tonne of CO2. At the second Woodland Carbon Guarantee reverse auction, the price paid per tonne of carbon offset was approximately £20. The Zero Carbon Commission is calling for a UK carbon price of £75 per tonne by 2030.
“Everyone wants to pay the minimum for carbon,” said Niel. “What we are doing is not ‘cheap, cheap, cheap’. We are trying to offer best practice. Our schemes are called ‘Canopy Carbon’ or ‘Carbon Plus’: Carbon plus Natural Capital benefits. If a project offers more than just sequestering carbon, we need a price hike. Even at £40–50 per tonne, which is what we think we should sell it at, Canopy Carbon schemes do not always financially add up.”
An interim solution may lie with ‘Nature for Climate’ funds enhancing current forestry grant levels. If, for example, from April 2021, funding of up to £14,000 per ha (including the maintenance grant) was offered, then the numbers start to add up.
“If we can say to a landowner that we can convert their farmland (Grades 3, 4, 5 and pasture) and it will offer an income to pay for income foregone, with ownership of the carbon and natural capital benefits to do with what they like after Year 25, and possible timber revenue, hopefully it will work,” Niel said.
One of the first schemes brought under the FCF banner (by Nicholsons) is for an 800 ha estate in the Cotswolds, with the landowner committing 140 ha (minimum is 3 ha). Situated near a small town, the site is a mix of arable fields and pasture sloping along a valley and down to a river. There are a number of disconnected copses and the river is prone to flooding, which affects local housing. Public access is permitted across part of the site.
The landowner’s objectives include: creating shelter, better air quality along a minor road, flood alleviation and enhanced water quality, and enhanced public access.
Nicholsons has designed a mix of woodland strips and interconnected blocks across the site. “On the exposed ridge we will plant a diverse mix for shelter,” said Niel. “By the road, oak, lime, sycamore, rowan, Norway maple and shrubs, with some Scots pine for winter air quality. For flood alleviation we will plant alder and willow in wet hollows to slow the water and benefit water quality. We will include areas of more productive woodland where applicable.” The project requires 25 km of deer fencing to protect the strips.
A national company is interested in providing the £50 per tonne of Canopy Carbon funding to offset its emissions for a year, because “it is not just carbon we are giving them. As well as sequestering carbon, this ‘Canopy Carbon’ scheme reduces silt in rivers, reduces flooding and near to a village it extends permitted public access (health and well-being) and more. I am hoping it might be a circular scheme whereby the ‘productive’ timber – plants hopefully sourced from a UK Plant Healthy (biosecure) nursery – might end up being used locally.” This scheme will store approximately 23,520 tonnes of carbon over 25 years.
Once permissions and possibly enhanced grants are secured, this scheme will be placed on the Woodland Carbon Code IHS Markit Carbon Registry and immediately allocated to the company. As forestry grants are paid on planting, Niel expects the same for blended finance funding, acknowledging that the landowner may be asked to make an interim contribution.
Potential carbon funding partners include a pallet company, and an international climate change company, which, having invested in schemes abroad, now want a UK offering. “If they can bring money, we can offer scheme assurance. If we can introduce productivity at the same time, that is for us to try to design in. Why not? As long as it’s not to the detriment of all other boxes we are trying to tick.”
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In addition to increasing productivity, FCF believes current estimates undervalue the amount of carbon stored in English forests (one government document estimates 125 Mt of carbon stored as of March 2020).
One FCF board member is developing satellite and drone technology with the potential to measure the height and diameter of every tree down to 2.5 cm resolution. “Flying over a canopy and ground-truthing again and again, eventually the machine will learn that, at a certain height and diameter, a tree stores so much carbon. We will make baseline surveys before planting starts and ground-truth probably every five years to prove exactly how much carbon is stored.”
FCF Canopy Carbon schemes appear to incorporate elements of natural capital. Does Niel think a monetary value can be put on flood alleviation?
“No one seems to have an answer to that yet, but ELMS will likely incorporate this type of thinking in four years time. In theory, paying money for an exact measurable, there can be no argument. How we do that I do not currently know. We are working with the Natural Capital Committee and will happily work with DEFRA and anyone else. Lots of people are involved and doing good work but all in fairly disparate bits. We would encourage people to talk to each other and create one system that, together, we can all make work.“
What will happen to FCF schemes beyond year 25? “We would like to carry on managing them, obviously, and we cannot guarantee that they will not fall into undermanagement. We would hope by then to have established a resilient woodland and because we will have planted many more trees by then, the industry will have become larger.”
To date, all the collaborators have given their time to this not-for-profit venture for free and it is hoped that the first six Carbon Plus projects will be planted in winter 2021/2022. Niel acknowledged schemes may morph as experience is gathered. As more projects come on board, he hopes the FCF will fulfill up to a third of the government’s tree planting aspirations for England (between 8,000 and 10,000 ha).
“When we get going, we hope to charge a levy from each project to pay for administration fees, some of the GiB verification processes and for research: research into soil carbon (can it be measured, and if it can, can it be monetised and sold?), squirrel control, tree shelters and single-use plastics.”
From the CLA Forestry Conference, land agents have expressed interest on behalf of their land-owning clients, as have two to three smaller investment companies. Forestry England wants to expand its forestry enterprise, for which FCF would offer a delivery service just to be able to plant trees.
Woodland managers Penfolds Woodland Management and Abbey Forestry joined FCF as delivery partners early on. Following our conversation, Niel had a two-hour Zoom with 12 more small to medium-sized private forestry sector businesses, all of whom were keen to sign up.
A few days later, Niel reported: “We now have 16 delivery partners scattered around England, but are looking for more. We are excited by the possibilities and we want to make it work. We would like the FC and DEFRA’s help, and for foresters, landowners and corporates to join us. We know the timing is right and we believe strongly in the Lawton principle of ‘bigger, better and more joined up’.”
Penfolds Woodland Management joined FCF as a delivery partner early on. With over 40 years of experience, gained in both the public and private forestry sectors, and a consultancy practice whose delivery team has grown steadily since featuring in FJ (June 2020), consultant Kevin Penfold explained why his consultancy joined FCF:
“Since I started in private practice I was struck by how disparate our industry is, especially when it comes to marketing our services and promoting woodland management and tree planting. I believe that, working together with other forestry professionals, we can help to deliver the ambitions to plant more trees nationally. It is essential we market our services effectively and communicate a clear message to make the process easy and seamless for the landowner and investor alike. I believe that with FCF, we have the opportunity to do that. It will then be down to us as FCF-approved providers to deliver quality planting schemes that will, in time, provide the multiple benefits we all know woodlands can offer.”
www.forestcanopyfoundation.co.uk
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