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Farmers and landowners in Wales may be approached by private companies wanting to purchase farmers’ carbon credits to offset greenhouse gas emissions.

Whilst there may be an opportunity for farmers to create a new income stream by selling carbon credits, landowners may need to be cautious about selling carbon credits until they know how much carbon their land can sequester and how much carbon they are emitting as a business.

Farmers can use a carbon calculator to help them assess whether they might have surplus carbon credits available for trading. This will allow businesses to calculate if there is any surplus that can be traded to third party, without affecting the farms’ ability to achieve net zero greenhouse gas emissions both now and in the future. 

Once farmers sell carbon credits, they cannot count them towards their own efforts to cut carbon.

This summer the UK ETS Authority, which is formed of Welsh Government, UK Government, Scottish Government, and Northern Ireland Executive, will be publishing its response to the consultation on ‘Developing the UK Emissions Trading Scheme (UK ETS)’ which included consideration of the inclusion of nature based greenhouse gas removal (such as afforestation). While this is in an early stage of thinking, the role of greenhouse gas removals in any potential market could impact the price and the market for land-based carbon credits in the future and may mean land-based carbon credits will become more valuable in the future. 

Further advice and guidance