Galbraith Forestry Matters Summer 2022

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n Nature’s wages n A Natural capital atlas n The challenges of woodland creation in the current climate n Nurture, grow, thrive n Traditional estate & forestry markets - The cross-overs are real

Summer 2022

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Welcome to

Contents

Forestry Matters Summer 2022

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Forestry Matters News Update.

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Biomass: Seeing the big picture.

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Nature’s wages.

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A Natural capital atlas.

I am delighted to introduce this edition of Forestry Matters.

In these pages we reflect on the wide spectrum of forestry activities and projects that occupy our time, covering everything from new woodland creation, insurance for storm damage, biomass issues, carbon codes, natural capital audits as well as estate, forestry and land sales.

We also have a guest article from Maria Bellissimo of Confor outlining the advocacy that the organisation engages in to promote new tree planting projects and timber supplies to sustain the UK’s well-developed processing sector.

I probably say this every issue, but it seems there has never been a better time to be involved in forestry and woodlands. Apart from the obvious pleasure of spending time with trees, the intense focus on meeting the challenges of our climate, biodiversity and resource crises, helps underline the importance of timber as a sustainable product which has a huge part to play in the transition towards more environmentally friendly resource use in a variety of industry sectors. The continued focus on carbon capture crystallizes the importance of woodland creation and peatland restoration in the minds of policy makers. Equally,

we find that foresters are increasingly turned to by those wishing to understand how to structure new woodland or restructure existing woodland to meet multiple objectives focused around carbon and natural capital.

There are of course challenges – and political discourse can sometimes get in the way of collaborative results – but the UK is in an excellent position to play a major role in meeting the challenges of the triple crises (see article page 9) while at the same time creating jobs and ensuring our thriving sector can continue to allow businesses to develop, both those with a focus on traditional forest outputs to those with an eye to natural capital.

13 Potential in peat.

14 Falling for felling.

16 Navigating a course along the corridors of power.

18 Too many cooks... The challenges of woodland creation in the current climate.

Whilst this brief publication gives an insight to aspects of what we do within the sector and what’s current at the moment, we would be delighted to meet and talk through any forestry, woodland or aspect of natural capital which may be of interest. So do please get in touch with me or one of the team at Galbraith. n 20 Powerful storms underline value of insurance & forest certification.

Athole McKillop 07718 523 045 athole.mcKillop@galbraithgroup.com

21 Nurture, grow, thrive.

22 Banking on riparian planting.

24 Traditional estate & forestry markets The cross-overs are real.

Galbraith is a leading independent property consultancy. Drawing on a century of experience in land and property management the firm is progressive and dynamic employing over 200 people in offices throughout Scotland and the North of England. We provide a full range of property consulting services across the commercial, residential, rural and energy sectors. Galbraith provides a personal service, listening to clients and delivering advice to suit their particular opportunities and circumstances.

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12 Net zero and beyond.

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27 Tree pest & disease – Summer 2022.

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Current UK timber market & future predictions 2021-2022 saw unprecedented prices achieved for sawlog material, demand for wood products was at an all-time high, with a booming construction industry and millions of lockdown DIYers.

We spoke with Jamie Hendry from Euroforest Ltd to get his view on the current UK timber market and future predictions for 2022-23.

After the record-breaking prices seen for sawlogs during late 2021, there was a slight downward adjustment in the final quarter of the year.

Prices for Spruce came back from ca. £100-115/t to £90ish.

Pine/Mixed conifer tracked this price fall from ca. £90-95 back to £85ish. Prices stabilised at this level in the first quarter of 2022 and have since rallied and look like increasing again later in 2022 as the demand increases for homegrown carcassing to replace Scandinavian/Baltic imports which in turn are replacing Russian/Ukrainian/Belarussian sawn whitewood into the EU. Nevertheless these prices are still very good compared with the long term prices that growers will be familiar with, so although not what they were at the peak they remain historically very good.

Small roundwood (SRW) prices did not achieve the same uplift as sawlogs during 2021, partly due to an increased volume of sawmill coproducts coming to market as a

result of extended sawmill working hours to meet increased demand for sawn timber. However, there was no downward trend in SRW prices during the mini-slump in sawlog prices in late 2021. Broadly speaking SRW prices have remained stable at ca £45-55/t for the past two years. The outlook is that with rising demand for SRW exports from the UK to the EU, which has already begun, the price will at worst remain stable or should rise by ca. £5/tonne in Q3.

The price differential for FSC versus Controlled Wood has gone from a fairly standard £2-3 per tonne, to a current differential of £10+ for sawlogs, and £3-4 for SRW. This is in part due to an oversupply of Controlled Wood brought to market in the wake of Storm Arwen from one-off sources such as farm shelter belts. Lack of FSC pure supplies is an issue in all timber categories, with large volumes of oversized Controlled Wood chipwood / fuelwood resulting from wind snap currently struggling to find a home, so if you are planning offering timber to the market you would be well advised to investigate taking the time to make sure it has FSC status if you want to maximize your returns and

ensure it moves to the end user unhindered.

The Russian invasion of Ukraine, whilst having a positive effect short term on demand for UK grown timber to replace imports, has the potential to have a serious impact on the global economy. Huge hikes in energy prices have already led to rapid increases in harvesting and haulage rates and other materials used in construction, such as steel and concrete, all require large energy inputs in their manufacture.

If this leads to a contraction in the economy or a recession, demand for construction timber will drop, and prices with it.

However, the general feeling within the industry at present is that demand should continue at present levels throughout 2022 with a subsequent return to similar sawlog prices as achieved in Q2-Q3 2021. n

Louise Alexander 07795 336 070 louise.alexander@galbraithgroup.com

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News

Forestry Matters News Update May 2022 The Queen’s Green Canopy The Queen’s Green Canopy (QGC) is a unique tree planting strategy to mark Her Majesty’s Platinum Jubilee in 2022. The strategy invites members of the public across Britain to plant a tree to mark the celebrations. All groups across society are invited to join the celebrations and work together, to create future proof and resilient woodlands for future generations.

Including the tree planting initiative, a new network of 70 ancient woodlands will be honoured to form the Queen’s Green Canopy, creating a network across Britain to celebrate Her Majesty’s 70 years of service. This network will help to improve resilience across the 70 ancient woodlands, by improving them and securing them for future generations.

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Royal Horticultural Society Calls for Chestnut Health Check The Royal Horticultural Society has launched a campaign for observant members of the public to join its `Check a Sweet Chestnut’ project in order to be vigilant against symptoms of Oriental Chestnut Gall Wasp. Although the wasp is predominately found around London and the South East of England, careful monitoring could prevent this potentially damaging pest from spreading further afield.

The wasp causes irregular growths to form on the leaves, buds and leaf stalks, resulting in reduced vigour and can make the specimen more susceptible to other tree pests and diseases. Predominantly affecting European Sweet Chestnut (Castanea sativa), however it can also affect less common more ornamental specimens of sweet chestnut, such as Japanese (C. crentata) and American Sweet Chestnuts (C dentata). Vigilance amongst members of the public can help to provide up to date locations of this tree pest.

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New Woodland Carbon Code Test To Deliver Greater Confidence and Settle Land Market Values

Hundreds of Thousands of Trees to be planted across England

The unexplained trend has been noted across Scotland, however Northern sites have less drastic levels of moth decline...

Local Authority Treescapes Fund and the Urban Tree Challenge Fund opened for applications on the 2nd of March 2022. Just under £10 million will be given to successful applications shared by both funds. The aim of the funds is to help meet tree planting targets and help to create diverse habitats. The UK government aims to plant 30,000 hectares of trees per year, by the end of 2025.

The fund has now entered its second stage, wherein successful applicants to the local authority Treescapes Fund will be awarded a share of the £5.4 million for the planting of up to 650,000 trees planted during 2022/2023. These projects will be managed by local authorities, aiming to establish new trees in a variety of different ways, from natural regeneration to traditional planting.

Community engagement is a vital part of the success of these projects, enabling collaboration between schools, local residents and environmental groups, in order to restore urban areas such as parks, riverbanks, roadsides, derelict land and footpaths. These areas are often neglected and forgotten, so regeneration in these sites will be highly beneficial to the local community.

New additionality tests created by Scottish Forestry to the Woodland Carbon Code aim to toughen the carbon credit verification scheme, as the carbon market increases at a substantial rate.

Scottish Environment Minister Mairi McAllan has said the changes would assure the public, potential investors and land managers, that the woodland carbon credits are trustworthy and will provide a net benefit for carbon sequestration.

In addition the new rules should help to provide more diverse species selection and identify which woodland creation schemes could be financially sound choices without the need for WCC funding.

Scottish Broadleaved Woodlands Suffer Largest Moth Decrease Rapidly declining moth numbers across Scotland’s woodland habitats has been most noticeable in broadleaf woodland, particularly in southern areas of study. Despite recent increases over the last few decades in broadleaf woodland habitats, the losses are significantly higher in broadleaf areas than in other environments such as intensive agriculture. The unexplained trend has been noted across Scotland, however Northern sites have less drastic levels of moth decline, than those further south. The reason for the decreasing numbers remains unclear for the time being, however, future studies could help to find the cause and help reduce further decline. n 5

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Biomass

Seeing the Big picture It might be argued that the mixed views, statements and debates around biomass and its contribution to a low carbon economy generate enough heat in their own right that there is no need to burn any biomass!

Views are often strongly held and polarized but, in recognising the valuable role of biomass in contributing to the decarbonised economy target of 2050, the UK Government, despite all the distractions it has faced in recent times, set out a high level Biomass Policy Statement in November 2021, with an intention to publish a Biomass Strategy in 2022.

Whilst the Biomass Policy Statement sets out a UK position there is a focus on England with recognition that devolved administrations have their own policies to help deliver the overall UK targets, including the more challenging 2045 target in Scotland.

All Governments generally accept that to move away from fossil fuels towards low carbon fuels to deliver net zero, biomass has an important role to play.

After wind it is the largest source of renewable energy in the UK – it provided 12% of our electricity in 2020.

However, it is also recognised that the use of biomass, to be effective, must adhere to some key principles including; compliance with sustainability criteria, consideration of feedstock availability, lifecycle greenhouse gas emissions, cost benefits and a move towards biomass use with carbon utilisation and storage, where feasible, and otherwise in sectors with limited or no low carbon alternatives.

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If you are lucky to have a big enough garden you may plant a tree. If you are even luckier you may plant another every year for thirty years...

We have been burning biomass in the UK to provide energy for centuries, even millennia; it’s as old as the hills. Some 15 thousand years ago we resembled Greenland and in the subsequent peak of the rewarming, around 8 thousand years ago, the moors of north England and the deep glens of the Highlands were bathed in forests of alder, birch, oak and pine. Even the Outer Hebrides would have had a fair covering of woodland thickets of hazel, rowan and birch.

All a source of shelter, food and firewood.

Around 7 thousand years ago the climate changed again (nothing new some may say…). With higher rainfall, the ground became waterlogged, minerals leached out and soils became more acidic. The combination of waterlogging and acidification ultimately produced an environment which resisted breakdown of vegetation, allowing peat formation to begin. Several thousand years later, with reducing woodland and fuel wood, we turned where available, to peat.

Irish records suggest that peat cutting for fuel began in the 1600’s, with the first commercial harvesting in 1825.

However, between early woody biomass uses and burning of longterm stored carbon we had already turned to fossil fuels. The earliest records of coal burning go back to 3490 BC in China with UK records of coal being used as a fuel in Roman Britain around 410 AD. Further records of coal use are limited until the 12th century although, like Ireland, it was not until the reduction in woodland stocks in the 16th century that a move away from biomass as the main heat source to coal, and peat began.

Sadly our forebears had not wisely and sustainably managed their woodlands. The management and exploitation of their natural capital and ecosystem services were out

of balance with their growing energy and food demands. I am not suggesting that, had they deployed better management skills, the current crisis would have been averted - far from it. The industrial revolution was inevitable, but what is clear is that to justify the use of biomass as an energy source, management of biomass crops and truly sustainable management must go hand in hand.

Whether we are looking simply to produce heat, to produce heat and steam to power generators, to process biomass into other fuels such as bioethanol or methane, all are processes that have a net carbon dioxide output. We cannot shy away from that fact. Yes, technology may develop to allow efficient CO2 capture and storage but, until then, we need to weigh up the advantages and disadvantages of its use, look carefully at carbon budgets and cost benefits – not just financial but also wider factors impacting on our environment and society.

I am first and foremost a forester, I grow trees. I understand some of them, occasionally talk to a few of them but I talk about them a lot.

They are tremendous creatures whether individually or as a crowd.

As they grow, they take in CO2 and turn it into a carbon store of lignin and cellulose, amongst other things. When we chop them down we find wood suitable for many uses: building, packaging, fencing, and some for burning. The burning does indeed return that stored carbon quickly to the atmosphere as CO2. Good or bad. Neither. It is repeatable, sustainable, indeed a regenerative cycle occurs, it is neutral if carefully managed.

I like the simple analogy Matthew Rivers made a few years ago in his role at Drax, often challenged over the reality of global shipping and burning of tens of thousands of tonnes of wood pellets every week.

It went along the lines of; if you are lucky to have a big enough garden you may plant a tree. If you are even luckier you may plant another every year for thirty years. Over that thirty years a good store of carbon is developed. After thirty years you are then lucky enough to be in a position to chop down that first tree, in the spring so leaving all summer for it to season. Come the back-end of summer, as you watch the autumn colours develop and warm your heart, you have a store of fuel to heat your home all through the approaching winter.

But last spring, after you chopped the tree down, you planted another to replace it and it, along with the other 29, have continued to grow and store more carbon.

By the time those chilly autumn evenings come along you have already stored up the carbon to balance that which you burn over the winter. And from here on you can continue to warm your heart and heat your home from the carbon you have stored up the year before.

And so much more does a woodland provide. Yes, there are many other forms of biomass but a woodland is special. As well as providing trees for fuel we mill good straight trees to use in low carbon building projects, they provide a farmer a means of diversifying his business, shelter his stock and provide huge potential to enhance biodiversity – don’t forget we do not just have a climate crisis, we have a biodiversity crisis too. And if the thoughts of all these emergencies start to stress you, then seek medical advice and you may well be given a prescription to take a walk in a wood.

Whilst there are much wider and deeper arguments for and against the role of biomass as an energy source in moving towards a low carbon economy, a really important and key message is that we must understand and manage our resources carefully, ensure we can replenish what we use and be able to measure the ebbs and flows. n

Athole McKillop 07718 523 045 athole.mcKillop@galbraithgroup.com

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Nature’s wages Biodiversity Net Gain will become a requirement for developers in England within a few years

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Humanity faces three existential crises – in climate, resource provision, and biodiversity. With only one earth, housing 8 billion people, we urgently need to invest in all three, and use land as efficiently as possible. It’s what we call natural capital management.

Forestry has, arguably, been doing this for decades, with ‘net capture and storage of carbon in the forest ecosystem and in wood products’ and ‘management in a way that conserves or enhances biodiversity’ integrated into business models through UKFS and UKWAS. Natural capital management mechanisms are now developing in many other sectors, and these have knock-on implications for forest management and wood production. The Woodland Carbon Code is a familiar example, enabling other sectors to use forests to make the final step of a net zero journey. The new kid on the block is Biodiversity Net Gain (BNG), which puts habitat loss – one of the biggest global pressures facing biodiversity – onto a developer’s bottom line.

What is BNG? We need development, whether housing to meet shortages, or the renewables and transport infrastructure of a lowcarbon society. Yet we also know that it is one of the biggest pressures on global biodiversity.

BNG is a market mechanism to manage the rapid infrastructure investment we need, without the habitat loss we cannot afford.

In England, BNG forms part of the 2021 Environment Act, and is set to become a regulatory requirement for developers in the next few years. Any development will have to measure the amount of habitat lost, and pay for at least 10% net gain, secured for 30 years. This encourages developers to avoid damaging valuable habitat in the first place, and creates an income stream for investment in nature.

Nature loss and gain are measured through the Biodiversity Metric 3.1.

This multiplies scores for distinctiveness, condition, strategic significance, and area (or length, for hedgerows and waterways), to calculate biodiversity units.

Developers calculate the units lost through their development, and

pay for compensatory units by uplifting scores on land onsite or nearby. This could either mean changing land use to higher distinctiveness, or improving condition.

This is already resulting in natural capital investment on the ground.

Because habitat takes time to develop, landowners near development sites are already undertaking baseline assessments and making interventions to uplift their scores. This creates a readymade ‘habitat bank’ of biodiversity units which are being sold to developers, along with a contract of maintenance for 30 years, ready for when they are needed.

In Wales and Scotland, BNG is not yet law, but there are firm plans to introduce similar mechanisms, through National Planning Framework 4 in Scotland, and Nature Recovery Action Plan in Wales.

Whereas carbon offsetting is voluntary and driven by market pressures, BNG is regulatory policy.

Selling Woodland Carbon Units is more like selling a house than selling bricks: proximity to the head office, participation of the local school, or presence of glamorous wildlife, add desirability value which can outweigh any notional ‘carbon price’ – while a bad-news story can ruin their value. With BNG, on the other hand, while developers will certainly want a good story, the price is more likely to be linked to the value of the land and the cost of maintenance.

BNG does have potential to bring neglected woodland into management, to create an income stream, and to deliver significant biodiversity benefits...

Woodland in the Biodiversity Metric Woodland biodiversity, like other habitats, is assessed on distinctiveness, condition, and strategic significance.

Eighteen native woodland habitats are classified as high distinctiveness, from upland oakwood to lowland beech and yew. There is no distinction for ancient and non-ancient woodlands, as the features characteristic of ancient woodland are measured independently in the condition assessment. Other broadleaf, pine or mixed woodlands are categorised as medium distinctiveness, and other coniferous woodland as low.

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The woodland condition metric is based on the England Woodland Biodiversity Group’s woodland condition assessment methodology, led by Sylva Foundation. This measures age distribution of trees, herbivore damage, invasive species, tree health, diversity and proportion of native trees, ground flora, vertical structure, veteran trees, deadwood, and nutrient enrichment. Where woodland has been felled, and the previous condition was not assessed, the condition is automatically fixed as ‘good’, to deter developers from clearing sites without measuring them.

Strategic significance has a lower weighting, but is useful for directing projects to the best location. Woodland would be given a high strategic significance score where it is identified in a local plan, strategy or policy. Where the location is ecologically desirable – for example expanding existing woodland, or adjacent to a river – it scores medium.

Urban trees, lines of trees, and hedgerows are also covered by the metric.

What is the potential?

BNG is no substitute for creating and managing forests yielding highquality timber, which is crucial for tackling the climate and resource crises. Yet BNG does have potential to bring neglected woodland into management, to create an income stream, and to deliver significant biodiversity benefits.

For example, BNG could be used to fund activities like deer or squirrel

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control, rhododendron removal, conservation thinning, or replanting of woods impacted by disease.

For example, significant BNG units could be gained by developing fragmented conifer blocks and hedgerows into a connected network of trees in a farmed landscape, providing benefits like shelter and firewood as well as the increased habitat benefit which provides the initial income stream.

For example, a strong theme of the recent ICF Climate Smart Forestry conference was tension between the need for more diversity in species and silviculture to deliver climate resilience, and the long period of lowered yields, increased management costs and risk involved in delivering these changes on the ground in a changing climate. 30-year BNG contracts, perhaps with construction companies also interested in demonstrating growing their own materials within a regenerative system, could provide a funding stream to bridge that gap.

BNG is overseen by local authorities, so the importance of contributing to local development plans is more important than ever.

Developers must deliver BNG within the same local authority, and as close to their site as is feasible, so the opportunity is greatest for peri-urban and lowland woodlands.

What are the risks?

Unlike the Woodland Carbon Code, Biodiversity Metric 3.1 does not yet consider ‘leakage’ – lost production being pushed onto other land, perhaps overseas and with a higher biodiversity impact. This has greater implications for food production: where farmland is already being lost for development, even more could be removed for BNG. The rural location, financial value, and habitat value of large wood-producing forests means wood production is less likely to be impacted. However, it would be good to see a leakage calculation in a future version of Biodiversity Metric, to enable BNG to better contribute to a balanced solution to the triple crises.

The detail of the metric has been evolving, and there remain possibilities of ‘perverse outcomes’ from the scoring mechanism.

Foresters might question why conifers are only given the same distinctiveness as arable, when their inputs and cultivation are generally lower, and importance as habitat widely recognised.

However, the farmer might point out that, through interventions like deer control, thinning, good tree health, and provision of deadwood, a timber crop could score more highly on condition. For all the farmer’s efforts to build soil biodiversity, reduce chemical inputs, or create a matrix landscape of zero-till crops, horticulture and orchards, their score remains stubbornly at 1.

Meanwhile, in the most longestablished habitats, woodland ecologists might query why the only ‘woodland’ habitat to be rated

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as ‘very high distinctiveness’, is mountain willow scrub when several types of grassland are in this category. The answer is probably that the metric here favours habitats less well protected by designations – but surely it would be better for all habitats to be designated and scored equally.

The good news is that the metric – as its numbering system suggests – is subject to continuous improvement.

As it is rolled out, it will be important that woodland managers and ecologists are engaged in its development, to ensure it delivers the best outcomes.

What other ways are there to monetise biodiversity?

There are already many ways in which biodiversity means business. Birds nesting on the ground or in trees cost planters and harvesters money. Otters and kingfishers increase the rental on a holiday cottage. Seaside property values rose 7% during the pandemic.

Carbon units from native woodland sell for higher prices than from spruce. Over a million people give money to the RSPB. Yet this ‘unregulated free market’ in biodiversity is inefficient and prone to abuse. BNG aims to put habitat loss and compensation on an evidencebased, costed footing.

Conclusion Biodiversity net gain is just one tool in the box of natural capital management, yet it is one that every land manager should understand. For sites near developments, it represents a significant income-generation opportunity. For everyone, it provides a powerful starting point for demonstrating habitat improvement with potential for a wide range of applications.

Natural capital management requires balancing and maximising the global goods of provisioning, biodiversity and carbon, as well as local benefits like recreation or flood prevention, across habitat types. It is a complex task, and BNG provides one useful piece of the mechanism to achieve it. n

Dr Eleanor Harris 07585 900 870 eleanor.harris@galbraithgroup.com

A Natural Capital Atlas We know how to measure the bottom line. We’ve learned to measure carbon. But how do you measure ‘natural capital’ – the total demands and impacts of our activities on the resources of the earth?

Natural capital management is a massive task, but for businesses, it’s becoming vital. Vital for confidence that their supply chains will continue to supply; that investors, regulators or customers will not call them out for environmental destruction, perhaps far away along the supply chain.

For forestry, it is vital for demonstrating not just good environmental practice, but genuinely regenerative production. It is about measuring the positive carbon and biodiversity benefits from expanding forests and using timber, which can be embodied in harvested wood and accounted for all along the supply chain.

Natural Capital measurement is a massive task, but it has to begin somewhere. So we have developed our ‘phase one’ natural capital assessment for land, which consists of three key elements.

First, a GIS-based ‘atlas’. This collates spatial data on natural capital assets such as climate, soil, geology, water and vegetation, from satellite imagery and sources like the Met Office and Ordnance Survey. It uses this data to model ecosystem services such as carbon storage, pollination, provisioning and recreation.

Second, our in-house land management expertise. Many spatial modelling tools are available; what distinguishes ours is that it has been developed inhouse by our farm and forestry teams. We have been on the learning curve together, and invested significant time in developing a tool which we not only understand, but have designed with our clients in mind to be as useful as possible. We know what the data says (and what it doesn’t) and what opportunities it suggests. While some of this is incorporated into

the ‘GIS brain’, the tailored interpretation and advice of expert human brains is equally important and forms an Estate Analysis at the head of the report.

Third, a routemap for action. The atlas should not end up on a shelf, a natural capital box ticked. From identifying management aims, to synthesising diverse land uses, to scoping projects worthy of investment, our assessment sets you on a natural capital management journey which in time should become a process as integral to business management as the financial accounts.

This assessment is a first step, providing an overview and identifying opportunities for further investigation. Many of these, such as woodland creation, peatland restoration, regenerative agriculture, or habitat creation, are services we already provide.

Over the coming year, we will be developing our toolkit to provide an increasing range of additional specialist solutions which correspond with the unfolding natural capital market.

Natural capital is complex and can seem overwhelming. Our assessment is the first step to finding a route through the maze.

The prize is great: in the maelstrom of market, regulatory, and environmental changes, natural capital management provides confidence that your business is resilient – both to extreme weather events and to the storms of human opinion. n

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& BEYOND New ‘additionality’ rules for the Woodland Carbon Code will come in this October. It’s one of the oldest examples of payment for an ecosystem service, and remains important – but carbon is getting onto the balance sheet in many other ways.

Carbon codes are an attractive policy tool for landowners, businesses, and governments.

They redistribute income towards decarbonisation without being a tax. They raise land management standards without being a regulatory framework. They are simple for buyers, light-touch for governments, and empowering for landowners.

Codes, however, have limits.

Increasingly, the mechanistic nature of carbon codes is meeting criticism. Their detailed requirements, intended to ensure robustness, leave them open to accusations of compliance in the letter rather than the spirit of the law – greenwash rather than decarbonisation. This is potentially disastrous because offsetting is all about confidence. There is no regulatory requirement to ‘go net zero’: the aim is to provide investors and customers with confidence that a business is serious about climate change. If carbon buyers are tarnished with suspicions of gaming the system, carbon units become as worthless as paper money in a collapsing economy.

Changes to the Woodland Carbon Code this October will make it more difficult for schemes with a high proportion of timber12

producing forestry to pass the ‘additionality’ test to register carbon. The aim is to make carbon units more credible, by not granting them for schemes which would have been financially viable as a result of timber sales. Yet the market impact this will have is hotly debated. Will it result in a cooled market for planting land? Conifer areas planted without grants? More mixed schemes with a balance shift towards less productive, or unproductive, broadleaf species?

Carbon-driven investors shunning timber altogether, surely a worse outcome for the low carbon economy?

There seem to be as many predictions as there are foresters, and we wait to see how it plays out in reality. What it highlights is that the Code is not the market for carbon, but a sluice in a rushing stream: a tweak may send the water gushing off in an unpredictable direction. The global carbon economy is rushing upon us, and it’s vital the rural economy understands it as a whole. If we become myopically interested in the design of our sluice, instead of understanding the whole catchment, we risk being overwhelmed by the flood.

The Peatland Code has also been updated recently. This is less controversial, as sites suitable for

restoration usually have fewer alternative options than land suitable for planting woodland. Yet peatland projects have struggled with long delays in delivery, so these changes aim to make it easier and quicker to get restoration started on the ground.

The impact of the new Woodland Carbon Code rules on the forestry market is unclear – but will they at least provide the ‘credibility’ sought after? Perhaps partially. Yet increasingly the critique of UK carbon projects is not about the project itself – “was the tree actually planted?” Rather, it is a critique of its use as part of a company’s credible journey to net zero – “is this company actually exploring alternatives to fossil fuel, or simply offsetting?” A different set of codes and standards cover this, which woodland owners concerned about who buys their carbon will find useful to understand.

In the quest for credibility, interesting things are happening in carbon markets. Businesses are using the metrics of the codes in their own ways to tell credible carbon stories without actually registering offsets; or exploring new technologies such as LiDAR or soil testing to demonstrate carbon benefit from land uses such as woodland management which don’t have carbon codes at all.

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| Forestry Matters | Summer 2022 Landowners are realising that carbon sequestered by their land, whether in trees or soil, is just one part of the whole carbon picture of their business, which includes both emissions from activities, and the benefit of primary production for a low-carbon economy (explored further in this issue in Falling for Felling).

The claim is key. ‘We are carbon neutral’ is easy to comprehend, but easy to criticise as greenwash.

‘These are our plans for carbon reduction, this is what we cannot reduce and why, and this is the measurable carbon benefit we are delivering over-and-above our business activities’ is more complex; but a rich, transparent, and credible claim in a world where investors and consumers are increasingly carbon-literate.

So while we can certainly help you with carbon credits on woodland creation schemes, we may also suggest you take a step back, to see them in the context of lowcarbon production and provisioning, climate adaptation and biodiversity. This can form the basis of a business plan based on a strong, credible, and increasingly valuable, carbon story. n

Dr Eleanor Harris 07585 900 870 eleanor.harris@galbraithgroup.com

The claim is key.

‘We are carbon neutral’ is easy to comprehend, but easy to criticise as greenwash...

Potential in peat What could be more fun than hiking across a peat bog in mid-winter?

That was the question I asked myself after sinking up to my knees for the umpteenth time whilst surveying a peat bog in the pouring rain with an ecologist from Peatland Action. As a forester I normally try to avoid the peaty areas but with the introduction of funding from Peatland Action and the opening of the Peatland Carbon Code we are now diving headlong into the peat!

Since 2012 Peatland ACTION through Scottish Government funding, have helped restore over 25,000 ha of degraded peatland across Scotland. In February 2020, the Scottish Government announced a further substantial, multi-annual investment in peatland restoration of more than £250 million over the next 10 years.

Through Peatland Action landowners can access this funding to carry out on-the-ground restoration activities. This includes installation of peat dams in historic drainage ditches to increase water levels, allowing the peat-building mosses, called sphagnums, to re-establish. It also supports more novel techniques, such as peat hag re-vegetating by using the surrounding vegetation to stabilise the bare eroding peat. All costs will be met by Peatland Action including the initial peat depth and condition survey.

Across Galbraith we are currently working up over 1500 ha of potential restoration projects. They range from repairing historical peat cutting areas in Stornoway to the more traditional degraded peat hags in the north Highlands.

The implementation of these projects has become slightly more interesting for landowners since the launch of the Peatland Code in 2015. The Code provides a platform on which landowners can register their restoration projects and quantify the carbon credits gained through the works and the reduction of carbon emissions from the peatland. Currently the Peatland Code forecasts over 10,300 ha of expected peatland restoration, reducing CO2 emissions by 304,239 tonnes. These units will be available to purchase for carbon offsetting projects across the UK. The current market value is between £10-20/t.

There are, however, some restrictions to these works. The cause of the degradation will be identified within the initial condition survey with a recommendation that the underlying cause is removed from the area. This will normally be deer or livestock. Peatland Action will not fund fencing within their package so this will mean either removal of livestock or a cull of deer. We have also been advised that as a ‘general rule of thumb’ Peatland Action will not look at funding any works where the number of deer per square Km is over 10. However, as Peatland Action are willing to fund the initial survey it is worth getting the results and looking at your overall landholding to judge the validity of such a project against your other interests.

There are no obligations to take the project any further but you might Louise Alexander find that “where there's 07795 336 070 muck there's brass!" n louise.alexander@galbraithgroup.com

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Falling for felling Natural Capital and Carbon leader Eleanor Harris for Galbraith writes about being an environmentalist who became a conifer convert.

You are probably tired of hearing about the three global crises which make business-as-usual unsustainable. The climate crisis making life on earth increasingly perilous. The biodiversity crisis depleting the quality and diversity of nature to an extent that undermines the ecosystems on which we depend. The resource crisis that means the world’s population risks being unable to enjoy an adequate standard of living.

To address the climate, biodiversity and resource crises, we urgently need to use our resources more wisely and produce more, while simultaneously drastically cutting carbon and increasing biodiversity.

This needs to be achieved not with handouts from the existing economy, but as a practical, effective transformation within the entire global economy itself. What a task.

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That’s why it was forestry which turned me from a campaigning environmentalist into a committed industrialist. It was through a chance meeting with a forester that my understanding of a forest changed from a static stand of trees, to a dynamic journey which tackles existential crises at every stage. Let me lead you briefly through that journey.

There is a perception that creating native woodland delivers better for biodiversity than conifer for timber production. I investigated this topic in detail for a report for Confor in 2020, Biodiversity, Forestry and Wood, reading dozens of scientific studies and consulting widely with ecologists and forest managers. I was left in no doubt that, in practice, in the distinctive land use context of the UK, biodiversity in timber-producing forestry has been increasing, while that in native woodlands has struggled. The scale

and speed of growth, the protection from herbivores and pests, the cycle of thinning and harvesting creating a diverse forest structure, the creation of deadwood through harvesting, and the environmental requirements such as inclusion of native trees and protection of watercourses, contribute to making woodproducing forests biodiversity powerhouses.

Foresters, in my experience, chose their profession from a love of being out in nature. They are thrilled to glimpse slow worm, capercaillie, osprey, crested tits, dormice, or the many other species which live in and around their timber crops – even when they do require special management at harvesting. Foresters are also delighted when a client shows interest in biodiversity, and the silvicultural tweaks or investments which can be made to enhance it,

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such as choosing a site which could favour low-impact silviculture or more diverse tree species, or interventions like installing nest boxes in a wood too young to have the veteran trees which provide habitat for owls, bats or bluetits.

Wood is not a glamorous product, packaged with eco-messaging and purchased unnecessarily by wealthy virtuesignallers. It is a basic necessity of life, bringing food to shelves and roofs over heads...

Dr Eleanor Harris

As for the climate crisis, I know of no other activity that tackles it in so systemic a way as growing timber. Genetic improvements mean UK timber trees suck up climate-changing atmospheric carbon dioxide at spectacular rates. A UK citizen is responsible on average for around 10 tCO2e per year: just half a hectare of timber crop will absorb this amount.

Yet it is when the timber is harvested, while the second fastest-growing crop is capturing carbon, that the magic really begins. Where does UK timber go? Around 42% is used in food production: fencing, pallets and packaging. A further 31% is used in construction, in various forms of sawn and engineered timber products.

20% is used for biomass fuel, and 4% for high-quality paper and board. Your forest manager will be able to tell you what the wood you grow is likely to be used for, and how your choices influence the end products.

The wood supplying the food industry is a relatively static amount, although there is significant interest in using it more wisely through higher levels of pallet and packaging refurbishment and recycling.

Biomass fuel has been growing, and its role in delivering the low-carbon economy is sufficiently complex to merit its own article in this Matters, by Athole McKillop. Timber in construction has the most significant potential for growth, and is where new timbergrowing capacity in the UK is most likely to be deployed. This has two spectacular carbon benefits. First, it keeps the carbon locked up for the long term, expanding the ‘virtual’ forest far beyond its local footprint. Second, it displaces the need for other materials like brick, block and steel, which have high carbon emissions at production. The home-owner will live in a changed climate as a result of those emissions, not

just for the lifetime of the house, but in perpetuity. Trees can re-capture carbon – but there is not enough land in the world to offset the emissions of these materials, and not enough time. Building with wood, a material manufactured by sunlight, takes away the problem: it de-carbonises.

Our final challenge is to use resources more wisely. We need to grow and use more timber, but that doesn’t mean we should squander it, because like all resources there is not – and cannot be – enough to go around under business-as-usual.

Fortunately, wood is one of the easiest materials to keep in use, and to dispose of without waste and pollution – unlike its major competitor materials plastic and concrete. From the humble pallet upwards, innovations to increase the use and lifespan of timber products is an important area for investment. These often do not involve technical breakthroughs, but achievable, logistical ones: getting the right wood to the right place for the right purpose.

Wood is not a glamorous product, packaged with ecomessaging and purchased unnecessarily by wealthy virtuesignallers. It is a basic necessity of life, bringing food to shelves and roofs over heads – tackling injustices like food - and fuelpoverty. It also supports skilled rural careers: around 30,000 in UK forestry and timber processing.

Ask our forestry team about growing timber: how your investment can create biodiversity habitat, capture carbon, deliver for the lowcarbon economy, support jobs, and provide a healthy financial return. Ask to visit some examples of good-practice forestry, and a local sawmill, because there’s nothing like seeing for yourself.

But be warned: if you are an environmentalist exhausted by existential crises, you might find yourself converted into an industrialist excited for investment and innovation. n

Dr Eleanor Harris 07585 900 870 eleanor.harris@galbraithgroup.com 15

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Slow and Navigating a course along the corridors of power

However, for England and Wales, ambitions and policy commitments are not matched by the reality on the ground and getting a planting scheme approved is increasingly challenging, as so many of you know very well. Recent statements, consultations, and policy papers both from DEFRA and the Welsh Government have raised even more concerns about a strongly antiproductive bias that will hamper tree planting even further.

Confor has been leading efforts to promote a balanced, evidence-based debate about forestry and tree planting for a long time and has recently stepped up its political engagement to this end. A key part of this work is conducted through the All-Party Parliamentary Group for Forestry and Tree planting in

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Westminster. The primary aim of the group is to convene MPs and Peers with an interest in trees, forestry, the environment, and the wood processing industry and provide them with an informative platform that encourages parliamentarians to advocate for supportive Government policies on behalf of the sector. The APPG is also an invaluable way to create opportunities for people involved in the sector - foresters, landowners, businesses - to directly share their experiences, concerns and challenges with policymakers, providing them with first-hand knowledge of the reality on the ground and the tools to hold Government to account.

its activities by holding regular meetings that have focused on a variety of subjects, from future wood supply to the carbon capture capacity of productive woodland, and have involved academics, politicians, business leaders, the Forestry Commission and Woodland Trust. These virtual meetings have made it easier for many of Confor’s members and others active in the sector who are spread across the country to get involved, resulting in a lively debate and many interesting contributions. While we plan to continue with virtual meetings to allow as many people as possible to take part, we will also convene inperson meetings with politicians.

Taking advantage of the digital opportunities brought about by the pandemic, the APPG has increased

At the end of April, the APPG hosted an afternoon reception in Westminster which was a happy

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steady...

In the last few years, trees have become a key part of the conversation around the climate emergency and the UK’s net zero target. They are the ultimate carbon capture and storage solution and most of the UK government’s plans rely quite heavily on fulfilling ambitious tree planting targets.

Confor has been leading efforts to promote a balanced, evidence-based debate about forestry

occasion to meet new and returning Confor members, listen to the excellent speakers, and raise important questions. After a warm welcome from the APPG’s chair, Ben Lake MP, Confor’s chief executive, Stuart Goodall, provided a stark message about declining availability of wood in the UK in coming decades just as demand both here and abroad increases and England and Wales fail to plant productive woodland. This is an existential threat to achieving government net zero targets, to protecting and promoting green jobs in rural areas and to avoiding increased pressure on fragile forests overseas. Lord Goldsmith, the Environment Minister for England who has responsibility for forestry, followed Stuart’s comments by recognising the UK’s

need for a steady, growing domestic supply of timber, but offered few reassurances to attendees about a tree planting strategy with a balanced mix of native broadleaves and productive conifers. In the following Q&A session with members, Sir William Worsley and Richard Standford, chair and chief executive of the Forestry Commission respectively, acknowledged the palpable frustration from members about the difficult, slow approval process for planting schemes and recognised that a risk averse approach adopted by some in the Forestry Commission is a challenge that needs to be addressed. Both businesses and the RSPB highlighted that current guidance on wading birds was not good enough.

The event was bittersweet. While we were reminded of all of the big challenges that are currently limiting the work of woodland creators and the growth potential of wood processing businesses, it was re-energising to be in a room of enthusiastic like-minded people, passionate about trees and forestry and determined to overcome these hurdles. If you would like to join us at our next event and become a part of the debate and solution, get in touch at maria@confor.org.uk n

Maria Bellissimo Confor

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Too many cooks...

The Challenges of Woodland Creation in the Current Climate

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Following the Climate Change Action Plan, Scotland has ambitious tree planting targets which are rising from 12,000 hectares a year to 18,000 hectares a year by 2024/25.

The industry has responded accordingly, meeting targets in 2020/21 and looking set to meet targets for 21/22.

However, with increased publicity comes higher scrutiny. Climate change has risen to the forefront of the agenda - in politics, the media and in public opinion. What was once considered an “easy win”- an affordable, low impact operation which removes carbon dioxide from the atmosphere- has now become more opaque. From opinions on deer fencing, rewilding, “green lairds”, impacts on peat hydrology, marginality and the impact on community livelihoods, woodland creation has become more challenging than ever.

In June 2021, Forestry Commission, Forest Research and Natural England published new guidance relating to the protection of peatland and the establishment of new woodland. Under this new guidance - applicable only in England - deep peat is now classified as any peat over 30cm: the rationale for this being that the previous 50cm threshold (still applicable in Scotland) precluded a large part of the carbon store and made it more difficult to restore peatlands effectively. How, then, are we to interpret this within Scotland? Whilst this is not policy, there is growing scrutiny within the media regarding planting on shallow peats and its effects on the wider hydrology. The vast majority of our schemes within the Highlands utilize shallow peats a move away from this would preclude much of our planting ground.

Over the course of the last year this question of marginality has created a challenge in accessing funding through the Forestry Grant Scheme (FGS). While areas appear eligible through techniques such as site surveying, probing, Ecological Site Classification and climatic suitability, these mosaics of shallow and deep peats are increasingly being classed as too marginal. The premise being that whilst the shallow peats will support tree growth - such as W4 Native Upland

Birch - they will not grow at the rates that are acceptable for the grant scheme.

This issue can become particularly contentious when seeking funding for high priority riparian schemes.

The UN has designated 2021-2030 as the Decade of Ecosystem Restoration in recognition of the scale of action required to tackle the biodiversity crisis. Increasing riparian planting will create a network of healthy river systems throughout Scotland, delivering a range of benefits including flood protection, improved water quality and increased biodiversity. A number of key tributaries have been identified by the Scotland River Temperature Monitoring Network (SRTMN), where riparian planting will be critical for keeping water temperatures down. Under current conditions, river temperatures could regularly reach 32°c by 2050, a fatal temperature for juvenile salmon. Many of these tributaries, particularly in the North West, sit within a mosaic of shallow and deep peats. While soils at the immediate riparian edge have more nutrient rich soils, FGS imposes a 15m minimum width on all woodland planting. If FGS funding is unsuitable are there any other funding schemes that would be viable?

Alternative funding sources are available. NatureScot runs a number of competitive funds such as the Nature Restoration Fund, which prioritises habitat and species restoration, freshwater restoration, coastal and marine management and control of invasive non-native species. Scottish and Southern Energy (SSE) are also seeking land for new planting. The regulations stipulate that SSE are required to carry out compensatory planting for any woodland lost. They will therefore fund the woodland creation costs, any potential loss of grant and while the landowner could not claim any carbon sequestration, SSE would compensate for this loss of income

based on the current market value.

While these would not be grant funded, all projects above the relevant thresholds would still be subject to an environmental screening.

However, the overarching question still remains - should we be planting these marginal areas? Is it good practice? There are a number of conflicting studies at present: some extolling the virtues of shallow peat in carbon sequestration versus the relative ineffectiveness of low yield class tree species, while others fully contradict this, stating that afforesting these areas increases carbon sequestration in the long term. There is also the risk of only prioritising carbon capture, where we should be assessing all elements of natural capital such as an increase in biodiversity - allowing vegetation to recover through reduction of grazing and trampling, improving soil quality, increasing micro-organisms, invertebrates andin turn- bird populations, stabilising the hill side, creating new habitats, keeping water temperatures down to increase fish populations providing a sustainable resource of timber, providing employment opportunities and providing woodlands for recreation and human health.

As ever, these factors should be assessed on a case-by-case basis.

Foresters will continue to follow best practice: seeking advice from stakeholders, consultees, regulators and communities. At the heart of it, we are all environmentalists seeking to do the right thing for the environment. However, with public scrutiny at its highest apex, we would encourage landowners to consider their projects well in advance. n

Heather Coyle 07825 382 084 heather.coyle@galbraithgroup.com

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Powerful storms underline value of insurance & forest certification The huge storms which hit the UK at the end of 2021 and beginning of 2022 led to widespread damage to many of the country's forests and woodlands.

Now landowners are looking to minimise any financial losses from windblown timber and to protect their investments, as it is likely such storms will become more common in future.

Windblow insurance – against damage caused by wind – is designed to protect landowners from the loss of income caused by such large-scale events. Windblow insurance premiums are calculated based on a variety of factors such as: elevation, age, ground conditions, species and accessibility.

Premiums With modern harvesting machinery, windblown timber can be harvested and brought out to sale. This has meant many people have been resistant to buying windblow insurance as it has been seen as an unnecessary expense when the windblown timber will maintain its value.

However, the timber can still lose value in a variety of ways: 20

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the working costs of windblow are higher than normal,

saw log and there will be a loss of green timber.”

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windblow timber can be snapped, split and twisted so it may be downgraded from log quality to chip quality,

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Windblown timber may be premature so there is a loss of the additional value and weight it would have added if it had grown to commercial maturity.

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Some species such as pine have a short time window to be processed before they begin to develop blue stain.

Rory goes on to explain how these policies provide value by recouping the value lost and not the full value of the crop. “The differences in the policies really comes down to whether your policy allows you to retain the salvage or not. That will dictate the value you need to insure against. For example I have a lot of clients who will only insure 50% of the market value for older timber, as they are confident the salvage in the event of a blow will still reach about 50% of the expected value.”

Therefore it is important to insure trees vulnerable to value loss, as explained by Rory Gibson from Lycetts insurance brokers, “Depending on the policy you take I would always advise insuring where you might lose the majority of market value. For example, with trees between the ages of 20 and 35, you will statistically lose the highest proportion of value as you are less likely to get the right length

Certification The widespread windblow has also resulted in an increase of timber coming to market, pushing prices down. Therefore it is important to make your timber as marketable as possible. Eco-credentials and sustainability are playing an increasingly significant role in consumers’ buying habits, driving the industry as a whole to recognise the value of being able to

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| Forestry Matters | Summer 2022 demonstrate that the timber used in products is traceable to a responsibly managed, sustainable source.

Forest management certification confirms that woodland is being managed in a way that preserves natural ecosystems, benefits local people and workers and ensures sustained economic viability. In the UK there are two forest certification schemes run by the Forest Stewardship Council and the Programme for Endorsement of Forest Certification. Both the FSC and PEFC schemes have endorsed the UK Woodland Assurance Standard (‘UKWAS’) as the benchmark for compliance and award of certification. Forests can be assessed independently or, to achieve cost savings, by joining a group scheme.

Forest certification can bring many benefits including higher prices for timber and access to markets with faster uplift of timber from the forest. Additionally the certification audit process provides forest managers and owners with an independent assessment of compliance with the law, forestry codes of practice and guidelines.

Additional income Smaller or less commercially focused forest owners’ timber will often not be certified as the cost involved will be greater than the potential additional income from harvesting.

In order for a mill to sell a product as certified, it must be made up of at least 70% certified material.

Therefore in times where supply of timber is very high and many mills’ log yards are full, such as now, certified timber is becoming the only timber they will accept.

Whilst windblow damage to woodlands has been fairly common, the severe storms we have experienced over the past fewmonths have highlighted the potential loss of value and income which can be caused from windblow damage to many forest owners.

Whilst it is impossible to predict the weather and stop trees being damaged in storms, it is possible for forest owners to protect themselves against potential future losses and to maintain the value of their woodlands. n

James Reid 07795 336 070 james.reid@galbraithgroup.com

Nurture, Grow, Thrive The Institute of Chartered Foresters is the Royal Chartered Body for forestry professionals in the UK, capable of granting members chartered status, in the field of forestry and arboriculture.

Five members of staff at Galbraith are progressing to chartered membership over the next two years, furthering their professional knowledge and skills in the work place. Dr Eleanor Harris, Natural Capital and Carbon Leader is presenting for chartered status this year.

Dr Harris explains why she has decided to go for chartered status, “I’m an environmental activist with a doctorate in history. This gave me a great combination of knowledge and skills to develop a career in natural capital – but I wanted to demonstrate my credentials as a professional in the rural economy too. Becoming chartered will put me on a par with my colleagues, despite our very different career paths. As much of my work is outwardfacing, it also give me the opportunity to promote the forestry industry as a diverse, professional, and progressive sector within the wider economy.”

Dr Stuart Glen of the ICF added, “Membership is a signal to clients that you are continually benchmarking yourself against the highest professionals standards in our sector.

Externally, and internally within Galbraiths, chartered status denotes your standing within the profession. It gives you parity with other chartered professionals and is an assurance for your employers, and importantly your clients, that you are a competent professional.”

In order to become chartered you need to prove you have had relevant industry experience in certain areas of competency’s, over a minimum of two years.

This experience will vary dramatically for each individual so the competencies cover a wide range of skills. By advancing to professional membership, members of the ICF increase their skills by ongoing professional development. Along with professional integrity and a wider support network, of liked minded professionals.

Dr Harris recently attended the 2022 ICF Climate Smart Forestry Conference in Glasgow, along with three other forestry colleagues at Galbraith. The event was the first in person conference for the ICF in two years. The conference was a valuable learning experience, due to the range of different speakers, with vast experience and knowledge. The main areas of focus at the conference were; site suitability, diversity, species selection and the need to move away from traditional forestry infrastructure. The event helped the attendees to gain a wide spectrum of knowledge to hopefully use in their professional careers, to help increase diversity within forestry and adapt to the changing climate. n

Kyle Sharpe 07825 064 560 kyle.sharpe@galbraithgroup.com 21

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Banking on riparian planting The riparian zone is the narrow strip of trees and vegetation on the banks of water courses or lochs.

Native woodlands which grow in this riparian zone are called riparian woodlands and form an extremely important part of the ecosystem.

These riparian woodlands often form a buffer between the adjacent land management and act as a link or wildlife corridor from one habitat to another.

They provide a wide array of benefits:

Deer, and other grazing mammals, can cause a massive amount of damage to young trees therefore it is very important to protect these trees from deer.

James Reid

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• Bank stability: The roots of the trees and shrubs help strengthen the banks of the river, reducing the effects of bank erosion and diffuse pollution.

• Temperature regulation: The trees’ canopy shades the river, which helps regulate the water temperature. This shade also restricts weed growth which can lead to choked watercourses.

• Improved food availability: Trees provide ideal habitat for many insects which in turn are prey for fish.

• Flood prevention: Trees can increase water infiltration and slow rainwater runoff, drastically reducing levels of flooding further downstream.

• Improving water quality: undergrowth can filter out nutrients and pollutants which may be running into the watercourse from adjacent land users.

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As the effects of climate change are becoming even more evident these impacts are especially highlighted in the number of Atlantic salmon which can be found in Scottish rivers. Salmon behavior and survival is significantly affected by the temperature of the water. Juvenile salmon perform best when temperatures are in the mid-teens and start to struggle when temperature rise to beyond 20˚C. At 23˚C these juvenile salmon will start to experience thermal stress and abandon their territory to look for cooler water areas. When the water temperature reaches 28˚C the fish will die within minutes. During 2018 it is estimated that around 70% of Scotland’s rivers experienced temperatures higher than 23˚C! Other fish species which can be found in Scottish rivers such as brown trout are even more sensitive to the rise in water temperature. This reduction in fish stock in Scottish rivers can have a massive effect on local economies and estates as reduced fish numbers and health lead to a reduction of income from associated recreation.

Whilst the benefits of riparian planting are evident there are many constraints which must be taken into account when planning a riparian planting scheme. The positive effects of riparian planting are greatest when planted in the upper catchments of rivers. However, with this comes more constraints such as

unplantable ground (deep peat), deer pressure and impact on landscape visuals.

Deer, and other grazing mammals, can cause a massive amount of damage to young trees therefore it is very important to protect these trees from deer. One option is to use tree guards; however, this doesn’t protect any potential natural regeneration which would help to create healthy age structure within the woodland. Tree guards are also often not cost effective and the majority of options available are made of single use plastic which leads to further environmental issues. Deer fences are the most effective way to protect young trees, although they can be seen as an eyesore in some of Scotland’s most scenic areas.

The UN has designated 2021-2030 as the Decade on Ecosystem Restoration in recognition of the scale of action required to tackle the biodiversity crisis which is happening around the globe. As such many different funding opportunities have been made available to help encourage the planting of riparian woodlands. The Forestry Grant Scheme funding model is a difficult fit for the smaller riparian schemes as the fencing of these areas isn’t seen as best value for the public purse. Therefore alternatives are required to make riparian planting more affordable.

Mossy Earth are a worldwide

offsetting company looking to restore wild ecosystems, support wildlife and biodiversity and help fight climate change. Their main project in Scotland looks to develop and promote more riparian planting of native species and they will provide trees to riparian schemes which qualify to certain standards.

MOREwood is a scheme run by the Woodland Trust funded by Lloyds Bank and Bank of Scotland which are offering to cover up to 75% of the cost of trees and tree protection for new woodland creation above half an hectare or 500 trees.

Scottish and Southern Electricity Networks (SSEN) is committed to no net loss of woodland through the construction of its projects from April 2020 and is aiming to achieve net gain by 2025, through compensatory planting projects.

SSE will cover all establishment and maintenance costs under a 20 year lease.

In the past the drive for food production led us to plant or graze right up to the margin of rivers but now we realise the natural capital cost is greater than the short-term benefit so it’s time to reinvest in water quality, flood prevention, resilience against global warming and fish stocks. n

James Reid 07795 336 070 james.reid@galbraithgroup.com

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Traditional estate & forestry markets...

The cross-overs are real The last three years have been significant and this is not a reference to the pandemic. It is the land market and particularly the now intricately knitted land and forestry/land for woodland carbon markets and wider Natural Capital interests which are more connected than ever before with the last year seeing some significant market shifts.

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Scotland is world famous for its outstanding beauty, open spaces, quiet corners and highly varied countryside, offering a bounty of outdoor activity opportunities, not to mention the numerous commercial activities of farming, forestry, leisure, tourism and traditional field sports which are generated from this rural environment and contribute significantly to the economy.

They are also some of the principal reasons why there continues to be huge demand to buy a Scottish estate.

Forestry investment has very much been seen as a safe and prudent option given the related fiscal benefits and the longer term nature of return from a renewable crop which continues to grow in demand. Traditionally, lower and accessible ground was sought, bought and planted with a focus on high quality timber production, but times have changed.

Over recent years we have watched the clear understanding and realisation of the need to be climate aware, businesses actively demonstrating a green ethos and meeting green goals, a desire to offset carbon usage and indeed by many a genuine drive to seek a more climate kind, if not climate reversing, focus and the now

widely seen Net Zero stamp on products. All this has resulted in carbon sequestration becoming a strong focus fuelling a dramatic growth in the demand for land to plant trees. Land traditionally not looked at for planting is now being considered and thus traditional estates, hill farms and marginal hill ground being bought for woodland carbon and Natural Capital projects.

As a firm, we have witnessed this changing market first hand. For example, in 2019 we brought to the market Auchavan Estate, an idyllic estate, lying within the iconic Angus Glens and offering the usual field sporting interests together with a number of houses, hill farming opportunities and forestry. Those interested in buying were principally traditionally-based with one or two conservation/re-wilding orientated buyers. Ultimately, it was a ‘traditional’ buyer who acquired the property. However, a year later Kinrara Estate in Inverness-shire was brought to the market and there was a much greater range of buyers looking to invest in woodland creation potential and associated natural capital outputs. We also arranged the sale of an extensive stock hill farm and without exception, all

the interest was in the potential to manage the natural capital.

This increased demand from a deeper pool of purchasers has meant values have gone up. This market intel is interestingly reflected by the recent report from the Scottish Land Commission “Land Market Insights Report - April 2022” which demonstrated increased demand and investor interest. However, it must not be thought that the more traditional buyer has disappeared, that is very much not the case. Buyers, not only based in Scotland and the wider UK, but also internationally remain keen to purchase an estate in Scotland, driven by their appreciation of the notable scenery, the great amenity and history, together with the traditional sporting interests of stalking, fishing and shooting.

Also, it is important to note that communities also aspire to acquire land and where they have registered an interest, by law, they have the first option to buy.

Continued investment in the Scottish Land Fund enables these transactions to continue.

The increased activity in the land market, with woodland related drivers, has also been seen in the productive forestry market too as reported in the 2021 forest market

All this has resulted in carbon sequestration becoming a strong focus fuelling a dramatic growth in the demand for land to plant trees...

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report. The active market of 2020 continued through 2021 with prices maintaining an upward trend, but not with the same steep trajectory of 2020. A total of £200.4 million of commercial forest properties were traded in 2021, very similar to the 2020 figure of £200.2 million.

This was represented by 67 separate transactions with a total net stocked woodland area of approximately 10,400 ha, which is down by some 17% on the previous year.

It is also notable the significant decrease in the average size of property from 205 down to 155 stocked hectares. There was, however, a strong increase in average value per stocked hectare from just below £16,000 in 2020 to a figure of £19,300 in 2021 equating to a rise of 21%. This increase in value follows the increases seen in 2019 of 23% and 2020 of 39% which means that over the last three years we have seen average values per stocked hectare more than double.

However, market trends do indicate that for the commercial forest market properties over 100 hectares in size are achieving the best prices with those below 50 hectares attracting less competitive 26

interest. However at the small scale, certainly below 20 hectares, the investment market is overtaken by the amenity and lifestyle buyer where values can be very variable but small properties with interesting features and located within easy reach of population centres remain in strong demand.

The location of the forest market transactions is also worthy of reference; Scotland held the majority of the forest market transactions at 76% of recorded sales, followed by 22% in Wales and a small minority of 2% in England.

The landed estate market and forest markets are both, hand in hand, seeing a much stronger, hotter market, with more buyers than sellers and the new institutional/corporate buyers being very much in the mix. Natural Capital, ESG and carbon are much talked about over recent years and these drivers are now impacting on property transactions, including productive forests with wider natural capital objectives often being cited, with this particularly being the case in relation to more diverse properties and strongly influencing the values for bare land which is suitable for woodland creation. As we all know and

recognise access has always been key for productive woodland planting but with the increasing demand for land suitable for carbon focused woodland planting, where timber may never be harvested, a lack of good access is less important allowing land with previously low values to achieve significant uplifts.

So to summarise, demand continues to far outstrip supply, land and forestry sales are now inextricably linked and the focus of green outcomes and drivers are not showing any signs of waning.

Therefore for those considering the sale of such property, now remains an optimum time. n

Emma Chalmers 07899 877 732 emma.chalmers@galbraithgroup.com

Athole McKillop 07718 523 045 athole.mcKillop@galbraithgroup.com

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Update

| Forestry Matters | Summer 2022

Tree pest & disease – Summer 2022 Phytophthora pluvialis The pathogen has fungus like characteristics, causing needle cast, dieback on shoots and oozing lesions on the roots, branches and trunk of infected specimens. The pathogen has been recorded in the USA since 2013, where it was identified on Douglas Fir and tanoak.

It was first discovered in the UK in Cornwall during September 2021, in mature stands of Western Hemlock and Douglas Firs. However it is known to infect a range of trees including pine (Pinus radiate, Pinus patula and Pinus strobus). After considerable surveying across the UK, further sites of infection were found in Devon, Cumbria, Surrey and various places across Scotland. The pathogen appears to be becoming more widespread, which will bring with it various challenges and ongoing efforts to reduce proliferation.

Adult European Spruce bark beetle, Ips typographus from the following species; Tsuga, Pseudotsuga, Pinus and Notholithocarpus, within the demarcated zones. Vigilance of land managers, forestry managers and land owners, could help to prevent larger scale outbreaks of this potentially very damaging disease.

Larger Eight-Toothed European Spruce Bark Beetle (Ips typographus)

Infected specimen showing oozing wounds on main stem In Scotland, Scottish Forestry have launched a management approach, to help slow the spread of the disease and reduce the damaging impacts caused by Phytophthora pluvialis. The Scottish Forestry website has a link to a symptom guide which will help forestry managers and owners, to help identify any potential infections. If any symptoms are found across the UK, forestry managers and owners should record this on TreeAlert.

Scottish Forestry have introduced Demarcated Area Notices, around recorded areas of infection, under The Plant Health (Official Controls and Miscellaneous Provisions) (Scotland) Act 2019. The purpose of these notices is to control movement of any wood, trees and isolated bark,

Ips typographus has now become a familiar name to many within the forestry industry, having been in the UK for around 4 years. The first recorded outbreak was in the South East of England, with further discoveries of colonies in Kent and East Sussex. The beetle is a pest to Spruce trees (especially Norway Spruce), as well as some other conifer species. The beetles prefer stressed, dead or damaged trees, however, in large populations they can affect healthy stands.

After the recent storms in the UK and many thousands of hectares of fallen woodland, Ips typographus now has an opportunity to spread and cause widespread damage. Due to the complex and time consuming effort involved in clearing up wind blown sites, the beetle could increase. The clear up of fallen trees has been very impressive across the UK and the timber industry should be very proud of their efforts in clearingand processing fallen trees on these damaged sites.

Forestry managers and land owners can help reduce the spread of Ips typographus by being vigilant to the symptoms of infection. Typically the

beetles will be found in dead trees however when their numbers build up to a certain level, they will move on to surround live trees and begin to damage these, causing eventual decline and death, often in collaboration with Blue Station Fungus. Symptoms are fairly easy to spot with the main areas to inspect being; galleries underneath any loose bark, where female beetles lay their eggs and larvae hatch out. This will present as a fairly large area of linear galleries, underneath the bark.

Larvae galleries will scatter outwards from these linear galleries, increasing in width due to the growth of the larvae, as they burrow along the galleries. Adult beetles will hibernate over winter, either within the bark of trees, within log piles or amongst layers of leaf litter. They will remain dormant until warm weather in the spring, typically above 20 degrees Celsius.

The Forestry Commission website has a link to the symptoms field guide, which should help forestry managers and land owners to look for symptoms, in order to remain vigilant to the threat of the beetle.

This pest has the potential to cause severe widespread damage to the UK’s commercial timber industry.

Any future wind blow events will need to be met with the same quick clear up approach, as the recent storms. n

Kyle Sharpe 07825 064 560 kyle.sharpe@galbraithgroup.com 27

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Expertise Galbraith operates from 13 offices across Scotland and Northern England bringing our clients a wealth of experience in: • • • • • • • • •

Building consultancy Commercial forestry & woodland management Commercial property sales & management Estate, farm & forestry sales & acquisitions Estates, farming & land management Natural capital & carbon Property lettings Renewables and utilities Residential estate agency

Contacts Athole McKillop Penrith/Edinburgh athole.mcKillop@galbraithgroup.com 01768 800 830 | 07718 523 045 Louise Alexander Inverness louise.alexander@galbraithgroup.com 01463 245 381 | 07795 336 070 Paul Schofield Perth paul.schofield@galbraithgroup.com 01738 456 064 | 07717 227 417 Hamish Robertson Perth hamish.robertson@galbraithgroup.com 01738 456 072 | 07899 877 730 Russell Porter Penrith/Hexham russell.porter@galbraithgroup.com 01434 405 971 | 07718 523 061 Dr Eleanor Harris Edinburgh eleanor.harris@galbraithgroup.com 0131 240 6960 | 07585 900 870