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Carbon Credits - getting paid to NOT cut your timber

Paying for carbon credits has been going on for 20 yrs. One company fails and another tries it. Has not taken off well but they still push it.
 
Boll Weevil said:
This might work because it's not mature enough harvest yet anyway. But I wonder if the timber has to be a certain age before it can be enrolled. Acres of saplings can't be possibly be consuming much carbon when compared to a stand of mature timber.

But you make a good point; if they'll enroll ANY timber stand, I can see where the landowner might have a win+win. CC for 25yrs + a timber thin in yr 26.
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I don't know but I would if it was younger trees. I only have 400-500 an acre in most of what I own so I'd call it a win at that 😂
 
I sell carbon credits....not for timber but for energy generated by solar panels. $32 per 1k KW hours generated. The contract is for 3 years. So I get 32-96$ monthly. I think the broker gets like $5 credit sold. It is very tightly monitored as to how much is generated on a daily basis.

It was a consideration when making the initial investment to put in the solar panels as it shortens the break even point by a couple of years. We had our panels put in 8 months ago and it has completely covered the power bill so far...not the credits but the generation itself.
 
readonly said:
I sell carbon credits....not for timber but for energy generated by solar panels. $32 per 1k KW hours generated. The contract is for 3 years. So I get 32-96$ monthly. I think the broker gets like $5 credit sold. It is very tightly monitored as to how much is generated on a daily basis.

It was a consideration when making the initial investment to put in the solar panels as it shortens the break even point by a couple of years. We had our panels put in 8 months ago and it has completely covered the power bill so far...not the credits but the generation itself.
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Very interesting readonly.
 
BSK said:
An example of the economics: my ridge-and-hollow property won't grow a food plot to save my life, but what it will grow - quite well - is Oaks. It will grow some amazing White and Red Oak. If we harvest an area down to 12" DBH, we can cut on about a 25-year rotation. Our part of the profits (after the split with the logger) ranges from $1,000-2,000 acre. Again, that's once every 25 years. These Carbon Credit companies are paying $200-300/acre over a 25-year contract, annualized (basically, $8-12/acre/year). So there's the difference. Sell CC for $200-300/acre every 25 years, or cut timber and make $1,000-2,000/acre every 25 years.
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I would have guessed the price per acre would be higher on the oaks but maybe it's dependent upon density per acre of the trees??? We finally managed to get our pines cut on our farm and the loggers just wrapped about a month ago. We didnt get $2k/ acre but we definitely were mid $1's depending upon the stand they were in. Feels good getting those babies out of there!
 
Deck78 said:
I would have guessed the price per acre would be higher on the oaks but maybe it's dependent upon density per acre of the trees??? We finally managed to get our pines cut on our farm and the loggers just wrapped about a month ago. We didnt get $2k/ acre but we definitely were mid $1's depending upon the stand they were in. Feels good getting those babies out of there!
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Our last cut, we did a 50/50 split with the loggers. The mill paid a hair over $4,000/acre for the trees (and that was a cut to 10" DBH), so we each made a little over $2,000/acre. But much depends on the price of oak at the time. Most of ours was being cut for white oak barrel staves (for craft distilleries).
 
I've been checking into this a bit and have an appointment Monday to get into further detail. I've got a place that was cut very hard 10 years ago and probably won't be ready for 30-40 years. They are claiming $230 acre. That's way more than my annual property taxes per year.
 
PickettSFHunter said:
I've been checking into this a bit and have an appointment Monday to get into further detail. I've got a place that was cut very hard 10 years ago and probably won't be ready for 30-40 years. They are claiming $230 acre. That's way more than my annual property taxes per year.
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Definitely let us know how it goes. It has peaked my intrest. We have 67 acres, all wooded except about 4 or 5 acres. It was logged back in 2001ish, per the Forrester that did my greenbelt walk through he estimates another 20 yrs before being ready to cut again. We have no intentions of ever cutting it or living on the land, so if the price is right, why not?
 
I had an appointment on this today. The program I was talking to is at $276 acre for me right now. They pay for the forester to do the forest management plan. You can opt out some acreage for a cabin or clearing a food plot or whatever. You can still do timber stand improvement and you can actually still harvest timber as long as that doesn't exceed 25% of the basal area. I have another appointment in December to talk to a forester to get more in depth on those details. 20% is paid upfront with the rest being in annual payments over the remaining 19 years. Is this greenwashing? Oh absolutely I think so but I'm going to continue looking into it with the forester.
 
PickettSFHunter said:
I had an appointment on this today. The program I was talking to is at $276 acre for me right now. They pay for the forester to do the forest management plan. You can opt out some acreage for a cabin or clearing a food plot or whatever. You can still do timber stand improvement and you can actually still harvest timber as long as that doesn't exceed 25% of the basal area. I have another appointment in December to talk to a forester to get more in depth on those details. 20% is paid upfront with the rest being in annual payments over the remaining 19 years. Is this greenwashing? Oh absolutely I think so but I'm going to continue looking into it with the forester.
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Would you mind sharing which group you're working with? Privately by pm is ok. Thanks.
 
DPinTN said:
Our club went far down the path but when it got down to the brass tacks pulled back. We looked at enrolling SMZs and a few other areas with no plans for timber harvest. When it got down to it the numbers turned out to be much less than initially presented and even then were not concrete since they would still have to be sold on open market.

I think it could still make sense immediately following a timber harvest (TSI/FSI) if you can find someone willing to buy the credits for a term that worked for your plan like 15-20 years.

All in all this is a very new market and as such there are a lot of unknowns and something we didn't feel comfortable entering.
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LOL thats EXACTLY what I was thinking! I just select cut some of mine a year or 2 ago and have no intentions of cutting that part of the property for several years, so if some DUMBARSE wants to pay my taxes on it for me for the next 20 years, IM IN! :D
 
At least for the one that I'm looking into, you must have a minimum stocking amount of 4000 bd ft per acre. You could then cut up to 25% of that. It is not clear to how the 4000 bd ft is calculated, ie at what size dbh does the count start. It is also not clear that anyone even verifies that. I will know more after December 6. The payment is approximately 10x what my taxes are on an annual basis.
 
BSK said:
Our last cut, we did a 50/50 split with the loggers. The mill paid a hair over $4,000/acre for the trees (and that was a cut to 10" DBH), so we each made a little over $2,000/acre. But much depends on the price of oak at the time. Most of ours was being cut for white oak barrel staves (for craft distilleries).
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Does that timber sale count as income when it's time to file taxes?
 
BMan said:
Does that timber sale count as income when it's time to file taxes?
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It's income yes, but not taxed as a capital gain until it surpasses the established timber tax basis…which is why it's so important to get that basis done early and accurately (or backdated estimate).
 
BSK said:
We've been getting mail from companies (actually brokers) who sell Carbon Credits to large corporations, who - by the nature of their business - release carbon dioxide. These "Carbon Credits" supposedly offset the CO2 the corporations are releasing (a physical scam, but that's beside the point). These Carbon Credit brokers will pay landowners NOT to cut their timber, as trees are major carbon sinks. The credit for the amount of carbon stored in the property owner's trees are then sold to the corporations.

I've done a bit of a dive into these companies, and although they're legit, the amount they pay is not high. However, they do pay every year of the 20-30 year contract, and the amounts would probably be enough to pay the annual property taxes. For those who never plan to cut timber, it might be worth a look. But if cutting timber is part of your management plan, you will make far more off the timber sales than what you would be paid by the CC brokers.
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I should be paid for every stupid person I meet and don't kill…..
 
This is something I might be interested in, although timber was cut about 5 years ago.
The only mailings I get are offers from real estate for about 1/4 of the value of the property.
 
I had more follow up on this today. The forester came out and looked over 3 tracts. The 1st tract did not qualify due to not having enough 12" DBH trees to meet the 4,000 bd ft per acre stocking requirement. It was at around 3000 bd fr per acre. The other 2 tracts do qualify and an offer is being prepared for $279 per acre. TSI is allowed, firewood is allowed at 5 cords per year, and timber harvest is allowed at no more than 25% of basal area. Clearings are excluded from the acreage for payment. I will probably do the deal. Timber on the 2 tracts will be ready for harvest in about 20 years when the agreement is up. You can renew another 20 or let it go. Yea you can still harvest under the contract but no logger here is going to let a forester tell them what to do, just how it is. The contract runs with the land if you decide to sell and there are severe penalties if you want to back out. A lot to consider.
 
PickettSFHunter said:
I had an appointment on this today. The program I was talking to is at $276 acre for me right now. They pay for the forester to do the forest management plan. You can opt out some acreage for a cabin or clearing a food plot or whatever. You can still do timber stand improvement and you can actually still harvest timber as long as that doesn't exceed 25% of the basal area. I have another appointment in December to talk to a forester to get more in depth on those details. 20% is paid upfront with the rest being in annual payments over the remaining 19 years. Is this greenwashing? Oh absolutely I think so but I'm going to continue looking into it with the forester.
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20% upfront doesn't sound like a very accurarially sound business model. They probably won't last too long paying that much up front. I'd opt for one that offered profit share from the markets.
 

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