Southwest Environmental Limited

Earnings from Planting Trees for Carbon Offset

The below worked examples relate to the UK. The prices indicated for sale of carbon are probably applicable on a European basis. But the price of land in the UK is such that use of the below figures out side of the UK would be misleading.

These prices are somewhat reflected in the varying price of carbon offset credits for tree planting say between Brazil and UK. Where Brazilian offset is far cheaper, likely linked to lower land costs, labor costs (minimal in either case) and perceptions of quality & rigor of the schemes in question.

Given this global competition and the affect it has on carbon credits prices, if you are landowner in the UK and are looking to raise funds, a better idea might be Biodiversity Net Gain or if you are "lucky" enough to be in a Nutrient Affected Area then perhaps Nutrient Credits.

Please contact us for no obligation chat about options (email us by hitting big yellow button at top of page).

Financial Analysis: 1-Hectare Carbon Offset Scheme

Based on the mid-range estimates of 700 tons of CO2 per hectare at 55.50 GBP per ton, here is the breakdown.

1. Costs for Setting Up & Running the Scheme

The calculation for the Total Net Cost over the 100-year project is:

• Land Purchase: 15,000 GBP per hectare.

• Planting Costs (Gross): 4,000 GBP.

• Grant Recovery (Assumed Max): (6,800 GBP).

• Net Planting Cost: (4,000 GBP cost - 6,800 GBP grant) = (2,800 GBP) (A net credit).

• Verification/Monitoring Costs: 10 visits (over 100 years) * 500 GBP per visit = 5,000 GBP.

• Total Net Cost (Over 100 Years): 15,000 (Land) - 2,800 (Net Planting) + 5,000 (Verification) = 7,200 GBP

2. Earnings Calculation

The Gross Earnings are based on the mid-range estimates for carbon sequestration and price.

• Carbon Sequestration: Mid-range estimate of 700 tons.

• Carbon Price: Mid-range estimate of 55.50 GBP per ton.

• Total Gross Earnings: £38,850

3. Net Earnings Summary

The Total Net Earnings and the average annual income are calculated as follows:

• Total Gross Earnings (100 Years): 38,850 GBP

• Total Net Cost (100 Years): 17,200 GBP

Discussion: Market Forces and Valuation

Agricultural Land Undervalued?

• Land's value is now incorporating an "ecosystem service" value (carbon sequestration) alongside its traditional food production value.

• Government grants for woodland creation and strong environmental targets will continue to increase the price of marginal land.

Future Price of Carbon

• Price Up Factors: Land scarcity for forestry projects and stricter government regulation on corporate emissions.

• Price Down Factors: Advancements in Direct Air Capture (DAC) technology, which could offer cheaper, alternative carbon removal solutions.

This page was re-written in November 2025 using Google Gemini