Why Forest Plantations Divide EU, Global South in UN Carbon Market

Exclusive: Divide over forest classification will define the UN-operated international carbon credit market

Sat 09 Dec 23


As the first week of COP28 winds down, global leaders are yet to decide if the new UN-operated international carbon credit market – pledged as part of the Paris Climate Agreement – will acknowledge the role of plantation forests in carbon sequestration.

That decision, which will see plantation forests included or excluded from the market, will have significant implications for global forests, according to Damien Walsh, a director of Margules Groome Consulting. 

Mr Walsh spoke exclusively to the Wood Central Publisher about the challenges awaiting negotiators working on standardised methodologies for credits between countries and trading zones.

“There is a lot of talk, especially in Europe, pushing for plantation (or planted) forests to be excluded from the international carbon market,” Mr Walsh said, “with the push to have the market limited to natural or natural restoration forest projects only.”

Much has been discussed about the carbon market; here is how it works. Lombard Odier explains the difference between voluntary and compliant carbon markets and outlines the importance of high-integrity carbon projects—footage courtesy of @FinancialTimes.

The EU is home to the world’s largest carbon market and, as part of its sweeping Green Deal reforms, is pushing to become the world’s first climate-neutral continent by 2050.

It has, however, a strong bias for natural (or native) forest restoration projects, which puts it at odds with countries outside the zone, including Australia, New Zealand and the Global South, which have invested heavily in plantations over the past 40 years.

According to FAO, plantations account for about 3% of the world’s total forests (131 million hectares) and have been the primary driver in reforestation and planting since the 1990s.

“The highest share of plantation forest is in South America with 99% (97% introduced species) of the total planted-forest area and 2% of the total forest area,” the FAO said.

By contrast, Europe has the lowest share of plantation forest, just 6% of the planted forest estate and 0.4% of the total forest area.

FAO is a long-time supporter of planted forests, with Latin America driving a surge in commercial plantations, which are exported as wood products, over the past 30 years – footage courtesy of @UNFAO.

Adding to the complications are discussions around additionality – a noticeable reduction in emissions compared to regular business activities.

Last week, Wood Central reported that negotiators must determine if credits should be issued only for demonstrated emissions reductions or if projects that aim to avoid releasing emissions can also qualify.

Known as emission avoidance, it will decide if countries that choose not to drill for oil reserves or protect forests from harvesting or logging should be eligible for credits in international markets.

Allowing emission avoidance into the UN-operated carbon credit market could make governments decide to close forests from logging and drive investment into the carbon market.

But this is disputed by Mr Walsh, who said, “reserving forests from harvest should not earn carbon credits for avoided deforestation if a managed forest that is regrown sequesters more carbon than a senescent one.”

“Sure, there may be a lot of carbon in a mature forest, but we need additional carbon, not existing carbon.”

Changing the carbon market to reward managed forest removal could reduce carbon additionality in the international carbon market. (Image Credit: Courtesy of FWPA)

He points to a recent Forest and Wood Products Australia report, which claims that the net carbon stored through a harvested forest on the NSW North Coast was more significant over time than the carbon stored in a forest managed for conservation.

“To be clear, every forest is different, and there are numerous variables that need to be taken into account,” he said before adding, “You need to take into account the carbon storage in wood products produced, replacement of fossil fuels with forest biomass for energy generation, and substitution of more carbon emission intensive construction materials (e.g. concrete, steel) with wood products.”

“The key here is that conservation forests eventually reach a stage where growth slows to such an extent that carbon sequestration from growth = carbon emissions from decay/decomposition.”

“Harvesting ensures the forest is constantly growing or regenerating and constantly sequestering carbon at a level greater than emissions from decay/decomposition when you look at a whole life cycle analysis of the wood supply chain.”

Without accounting for the supply chain, “we lose you lose any ability to earn credits from green construction or fossil fuel replacement later in the supply chain.”


  • Jason Ross

    Jason Ross, publisher, is a 15-year professional in building and construction, connecting with more than 400 specifiers. A Gottstein Fellowship recipient, he is passionate about growing the market for wood-based information. Jason is Wood Central's in-house emcee and is available for corporate host and MC services.


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