The forest carbon cycle
The systems and markets for achieving the EU climate goals
The EU Emissions Trading System (ETS)
The EU emissions trading system works according to a “cap and trade” procedure and represents the regulated CO₂ market in the EU. The most emissions-intensive companies in the EU are allocated a certain amount of emission allowances every year. If more is emitted than authorized, then you have to pay for the amount above.
Voluntary CO₂ market
The SILVACONSULT® Forest Carbon Standard methodology is currently only used by Tree.ly in the voluntary market. In order for companies to receive credits from Tree.ly, they must submit an emissions reduction plan. In addition, companies are shown what they are allowed to communicate with the credits and what they are not. This means that higher standards are voluntarily set.
The SILVACONSULT® Forest Carbon Standard
Our methodology of choice
TÜV Nord confirms success in September 2022
Structure of the methodology
Reference scenario (baseline)
Upper model value and project scenario
The project types
Carbon removal projects
Carbon conservation projects
Additionality, leakage and permanence
When implementing climate protection projects, it must be proven that the project leads to additional emissions savings and would not be implemented anyway (even without the sale of emissions credits). For example, less wood use and an extension of rotation times will increase the average supply on the project area in the long term. As part of our climate protection projects, the forest owner can either: A) Commit to maintaining a certain stock within the defined model values over the duration of the project or B) Build a target stock within a defined time within the model values. The distinction between A) “carbon conservation” and B) “carbon removal” is also made in the Paris Climate Agreement.
Leakage is the shifting of greenhouse gas emissions. This occurs when emissions arise elsewhere due to the implementation of a climate protection project and emissions that should be avoided (partially) do occur. These risks exist primarily in forest or land use projects. An example of this would be if forests are cleared elsewhere due to the reforestation of pasture land because new pasture areas are needed. A general distinction is made between internal and external leakage. Tree.ly avoids internal leakage by requiring a forest owner to consider their entire forest in the project. Excluding areas is possible, but must be justified and it must be conservative with regard to the C balance. External leakage is avoided by demonstrating whether the national usage volume of the country in which the project is located is lower than the usage potential. In this case, leakage can be assumed to be zero. Otherwise, a leakage of 10% must be deducted.
Permanence and risk buffer
Emissions savings must be permanent. The permanence of our project is ensured by a defined project term of at least 30 years for commercial forests and 50 years for forest reserves. There are risks in forest projects such as wind throws, pest infestation or drought. This risk is countered by a buffer that allows 10% of the carbon credits to flow into a solidarity-based, cross-project risk pool. This compensates for damages in the event of force majeure events.