Clear on the new additionality rules?

We previously published a blog post on the role of additionality in carbon markets. This was set against a rise in questions around additionality, and what (if indeed anything) it was good for. We argued, then as now, that it’s absolutely crucial. 

In early May this year the Woodland Carbon Code (WCC) released Version 2.2. which came into effect on October 1st 2022. The key changes are as follows: 

1. How additionality is assessed
2. Added transparency on project revenue streams

For the WCC this comes after a long and thorough process, where two independent reports, stakeholder consultations, and internal analysis by the WCC team came together to shape a revised set of additionality criteria.

Additionality – a quick overview

In a nutshell all additionality means is that the buyer of a carbon offset (and let’s not forget – that’s where the money comes from in the voluntary market) must be able to make the claim that by buying that offset they have affected change. 

This means that projects must be able to show that without the added income from the sale of those credits - woodland creation would not have gone ahead.  This is usually demonstrated by showing that planting in the absence of carbon is not the most financially attractive use of the land. 

Projects need to show that without the carbon income, the project would not have gone ahead. 

This means that the WCC cannot be used for woodland creation that is a legal requirement (e.g. compensatory planting or restocking) and cannot be used for projects that are financially viable in the absence of the added income from carbon. 

So, what’s changed? 

The key change to how additionality is assessed is the way in which projects show financial additionality.

The test has been simplified and standardised, to be more easily applicable for owners, project developers, and auditors alike. This will provide greater certainty to landowners and farmers considering woodland creation, as the standardised tests can be applied early on in project planning.

The other key change is that high up-front costs (e.g. land purchase price) can no longer be used to prove a project’s additionality. This means that projects where land has been purchased for, e.g. carbon and timber, must still show that the planned project is not financially viable without carbon as compared to previous land use. 

More info can be found on the WCC website

Going forward

The new tests apply to all projects submitting their validation documents from 1st October 2022. 

They are most likely to affect larger scale productive forestry schemes, where future income from timber is sufficient to make the planting a financially viable long-term investment. In the light of increasing scrutiny on carbon markets, and the quality of carbon credits, the changes to the additionality tests should secure buyer confidence in UK based projects. 

If you have any questions about the new additionality rules, the Woodland Carbon Code, or anything else, we have 16 years of experience in the UK voluntary market, and we’re here to help…

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