How much can I earn by planting trees?

“How much can I earn by planting trees?” Figuring out how to navigate the various grants available for woodland creation and management on your farm while also understanding the associated costs and benefits, can be challenging.

That’s where Tilhill and CarbonStore comes in.

We can help diversify your income by establishing a resilient, productive woodland that will be a valuable asset for your farm.

There are numerous financial options available that support the growth of England’s forests and woodlands.

For example, we now have the most generous woodland creation grants available in decades and carbon-related funding is increasingly attractive. Timber is another reliable long-term income stream.

Identifying plantable Land

It is well known that tree planting is an attractive use for the less productive, marginal areas of a farm and the first step is to identify which fields you want to plant.

It’s worth keeping in mind that a small number of large blocks of woodland, for example 10 hectares (ha) or more, earn more per hectare than many small blocks.

The Woodland Creation Planning Grant

With the designated land identified, the next step is straightforward and informative.

A Tilhill forest manager will visit the farm, walk the ground, identify any constraints and opportunities, and draw up a detailed design plan for the proposed woodland, in line with your objectives.

For schemes of 5ha or more, this scoping work is eligible for funding through the Woodland Creation Planning Grant which, with your permission, we can apply for on your behalf.

At this stage, you will also start to have a clearer idea of the total income available from the woodland.

Designing the woodland: Maximising your income

The woodland’s tree species mix has a strong influence on its long-term financials, and we would recommend a careful mix of broadleaves and productive conifers to ensure you generate income from both timber as a crop and carbon funding.

This approach maximises and diversifies income streams whilst increasing biodiversity and mitigating risk to your growing investment from pests and disease.

Current requirements of the Woodland Carbon Code mean that conifers are unlikely to comprise more than approximately 40%-50% of the mix of trees.

You should also be able to establish some productive broadleaves to generate timber income in years 60 or 70.

CarbonStore, Tilhill’s woodland carbon division, will be able to advise on the optimal species mix that will maximise timber income while also securing carbon income.

Applying for grant funding

With the woodland’s boundaries and the species mix agreed, Tilhill’s forest manager can then apply for capital grant funding, which may be done through the English Woodland Creation Offer (EWCO) or alternatives such as Trees for Climate Funding through England Community Forests.

Depending on capital works and eligibility for supplementary payments, the grant rates currently available mean that project costs like fencing, groundwork and tree planting may be entirely funded and the scheme established at no cost to the landowner.

There are some caveats to this. Fencing costs will be higher when many small blocks need to be enclosed.

Similarly, delivering materials like trees to numerous locations is expensive and time consuming. Roading costs may not be fully covered by grant funding either.

The woodland’s design is therefore key to maximising the efficiency of the available grants.

Considering the additional payments

It’s also worth keeping the EWCO additional payments in mind during the design stage.

Tilhill’s forest manager will be well-versed in the technicalities of the EWCO and can help you maximise these, where possible:

• Up to £2,800/ha is payable to woodlands which support nature recovery. For example, where 80% of the species are native and where no more than 50% is comprised of one species.
• £400/ha is payable for woodlands which improve water quality. This will depend on the location of the farm as much as the woodland’s location, but productive conifers are allowed.
• £500/ha is also available for woodlands supporting flood risk management. Again, the woodland’s location is a key influence and productive conifers are allowed.
• £1,600/ha is payable for riparian buffers. Again, this depends on the planting site and requires native species to be planted within 10m of a watercourse.
• £500/ha is available for woodlands planted close to settlements. As above, the Forestry Commission’s mapping guidance determines a woodland’s eligibility for this.
• Finally, £2,200/ha is payable for woodlands offering permissive (pedestrian), recreational access. The woodland must be close to settlements with access available 365 days per year.

Tilhill: Completing the grant application

Completion of the relevant application forms will involve multiple regulatory checks. Have local stakeholders been consulted about the woodland?

Will the scheme impact any protected species or habitats? Do we need to protect any scheduled monuments or cultural heritage?

Considerable time can be added to the approval process if the woodland lies within an environmental designation.

Tilhill’s forest manager will be able to provide expert assistance with an often complex regulatory process, before completing the application form and submitting it to the Forestry Commission for approval.

Ideally, this is completed in early spring which allows the Forestry Commission’s woodland officer ample time to resolve any issues so that the grant funding is approved in time for the following planting season.

Tilhill: Planting the woodland

With approval and a grant contract in place, the woodland is ready for planting.

Once again, your Tilhill forest manager can arrange every part of this, including ordering suitable trees, overseeing any fencing, arranging the ground preparation, co-ordinating the planting labour, and ensuring everything is completed to a high standard in accordance with the UK Forestry Standard.

Estimating a woodland’s potential income

As explained earlier, combined grant packages mean the woodland may be designed, fenced, and planted at little or no cost to the landowner.

However, it now needs to generate an income that outweighs the amount foregone under the land’s previous use. Subsidy payments, carbon and timber income are the three principal sources here.

• Woodland maintenance payments: Maintenance payments are available on newly planted woodlands in England at a standard rate of £350/ha/year for the first 15 years. Although a ‘beat up’ (replacement of any dead trees) may be necessary after planting, these will provide a welcome source of income in the woodland’s early years, worth approximately £250/ha/year.
• Carbon funding through the Woodland Carbon Code: A woodland comprising of 40% conifers and 60% broadleaves, will also be eligible for carbon accreditation by the Woodland Carbon Code. Over 40 years, each hectare would likely capture roughly 320 tonnes (t) of carbon, according to the Woodland Carbon Code, with each carbon credit or tonne of captured carbon worth around £35 each.
• Timber income: Finally, the woodland will also generate timber income from both the conifers (in year 40) and broadleaves (in year 65/70). Each hectare of conifers grows roughly 360t with each tonne worth around £45/t. From the broadleaves, you could also expect approximately 250t/ha 65 years from planting worth about £70/t at current prices.

Estimating an annualised income per hectare

Focusing the income potential on the woodland’s first 40 years and assuming a 15ha woodland comprising 6ha of conifers and 9ha of broadleaves would realise the following:

• Net income of £250/ha/year from the maintenance payments would generate (15ha x 15 years x £250) total income of £56,250.
• With each tonne of captured carbon worth £35 each and each hectare capturing 320t, the total carbon-related income would be (£35 x 320t x 15ha) about £392,000.
• Finally, the harvesting of 6ha of conifers generating 360t of timber a hectare worth £45/tonne would generate total income of £97,200.

In its first 40 years, this illustrative 15ha woodland could generate a total income of approximately £545,450, equivalent to £910/ha/year or £370/acre annually.

Of course, allowance must be made for the restocking costs to replant the 6ha of harvested timber. The long-term nature of woodlands means these estimates, which are based on current prices, are inevitably liable to significant variation.

By partnering with Tilhill, you can embark on a journey towards a diversified income stream, while contributing to the preservation and growth of Britain’s forest and woodland resources.

Tilhill is the only forestry management company covering the whole of Britain with 18 regional offices across England, Scotland, and Wales.

For more information, please email Simon Marrington on simon.marrington@tilhill.com or call 07825 193278.