Forest Carbon Credits

What is a carbon credit and what is its significance?

Fighting climate change has become a major global challenge, and carbon credits serve as an essential tool in this sector. One carbon credit equals one ton of CO2 that is sequestered or prevented through various environmental protection activities. This mechanism allows companies to offset their emissions by utilizing credits from projects that absorb carbon dioxide or reduce greenhouse gas emissions into the atmosphere. The voluntary carbon credit market offers this opportunity to companies wishing to improve their environmental impact.

In the international carbon market system, credits are verified according to strict standards, such as the Verra Verified Carbon Standard (VCS). Following such a carbon standard guarantees reliability and transparency for all participants. Each credit is real, measurable, and verifiable, ensuring fair and effective transactions in the open market.

SIA Palus, acting as the authorized representative of the Ecobase carbon project in Latvia, offers land and forest owners the opportunity to participate in the program and earn additional income. Our mission is to help landowners understand how carbon markets operate and how to manage their resources effectively to maximize the benefits of participating in the project.

How are carbon credits created?

Credits are generated by executing activities that reduce greenhouse gas concentrations in the atmosphere. Forests are among the most effective natural resources in this regard because trees actively sequester CO2 and convert it into biomass. This carbon accumulation is precisely documented and calculated using scientific methods and satellite data. The market relies entirely on this verified data.

Within the Ecobase project, landowners receive compensation for every ton of sequestered carbon provided by their growing forests. Credits are issued once a year following an independent verification process that guarantees objectivity and reliability. Importantly, carbon credits can only be generated from projects that meet international criteria and provide a real, measurable environmental benefit to the entire society.

To earn carbon credits, a forest owner must participate in a certified program and ensure compliance with specific criteria. SIA Palus provides all the necessary support, starting from initial consultation all the way to selling the carbon credits on the market. The team helps to understand the requirements and maximize the benefits of participating in the carbon sequestration project.

Carbon Market Operation and Advantages

The voluntary carbon market is a rapidly growing sector where companies voluntarily choose to purchase carbon credits to offset their greenhouse gas emissions. Unlike the compliance carbon market, which is regulated by governments and international treaties, the voluntary carbon market involves companies that personally wish to demonstrate a commitment to sustainability and environmental protection.

The market has experienced significant global growth in recent years. More companies are committing to reducing their negative carbon impact and reaching climate goals using compensation mechanisms. This trend dictates the value of the carbon credit and creates favorable conditions for landowners in Latvia. Currently, the market demand for carbon is increasing, which positively affects prices and attracts new participants from various industries.

The market also offers flexibility to owners because they can choose to sell credits immediately, accumulate them for future periods, or use them to offset their own emissions. For companies wishing to reduce their carbon footprint, purchasing carbon credits is an effective solution for achieving sustainability goals.

The carbon market continues to develop and offer new opportunities. It promotes investments in projects related to sustainable agricultural and forestry practices, creating a positive impact on the environment and the local economy. Consequently, owners gain not only financial returns but also moral satisfaction from their contribution to climate protection.

How much is a carbon credit worth?

The value of a carbon credit is variable and depends on several factors. Project quality, the utilized standard, geographical location, and additional environmental benefits are elements that influence the carbon credit price. Prices can fluctuate from a few euros to several tens of euros per ton of CO2, depending entirely on the project specifics and the market situation. High quality credits derived from verified afforestation carbon projects are generally valued higher than other types.

Within the framework of the Ecobase project, 70% of the issued credits belong to the landowner, while 30% goes to the project manager. This ensures a fair distribution of revenue and motivates owners to actively participate in the program over the long term, taking proper care of their forest quality.

Experts project that prices will continue to rise as more companies commit to achieving climate goals by the years 2030 and 2050. Demand is currently increasing rapidly worldwide. Early participation allows you to enjoy long term benefits and provides stable additional income from the forest property. For those wishing to join a carbon program, now is the right time to start and benefit from the growing demand.

How does the carbon program work?

The Ecobase carbon program offers landowners a simple and transparent way to earn additional income from their forests. To join the program, the owner signs an authorization agreement with SIA Palus, which acts as the official Ecobase representative in the territory of Latvia and provides full support throughout the entire process.

The program operates as follows:

  • First, the land area and forest potential are evaluated. The minimum area for participating in the afforestation project is 1 hectare if SIA Palus services are utilized, or 5 hectares if the owner performs the afforestation themselves.
  • Next, precise calculations of CO2 sequestration are performed using internationally recognized methods.
  • The results are documented and verified in accordance with international standards.

Carbon credits are issued once a year, and payments to the owner are processed within thirty days after the sale. The owner can sell the carbon credits independently or entrust this process to the Palus team.

Importantly, the program does not restrict economic activity in the forest. The landowner retains full control over forest management and all business decisions. The only obligation is to provide timely information regarding planned timber harvesting, as this can affect the calculations and the future issuance of carbon credits.

Water drops on pine needles, forest ecosystem.

Why credits cannot be received from forest regeneration?

One of the most frequently asked questions is why carbon credits cannot be obtained from naturally regenerated forest areas. The answer relates to the core principles of international methodology and the additionality requirement, which remains mandatory for all projects regardless of their location.

Carbon credits can only be issued for activities that provide additional CO2 sequestration. Natural forest regeneration would occur even without human intervention, meaning it does not meet this criterion and cannot serve as a basis for issuance. Regenerated areas do not create new sequestration at the system level because the forest was already present there previously. This specific requirement ensures that the market preserves its integrity and that every credit corresponds to a real environmental impact.

SIA Palus helps landowners understand these conditions and find the most suitable areas for participation, ensuring that the invested time and resources pay off with carbon credits in the future.

Improved Forest Management Project

Alongside the afforestation project, SIA Palus offers forest owners participation in the Improved Forest Management program. The IFM project entails generating credits by evaluating the entire forest portfolio of the owner, rather than assessing separate compartments. This means there is no need to track each compartment individually, and the program remains accessible to participants in the voluntary carbon market.

Carbon credits are primarily generated by mature forest stands that the owner chooses not to harvest for at least one year. The forests must be FSC or PEFC certified to ensure compliance with international requirements. SIA Palus is currently establishing a PEFC group certification for its clients, making participation even more accessible and convenient. 

The IFM project serves as an ideal solution for those who wish to earn additional income from carbon credits without significant restrictions on their economic activities. Administratively, it is sufficient to submit the State Forest Service (Valsts meža dienests) database file once a year, and the Palus team handles the rest.

Compensation Mechanism and a Sustainable Future

By participating in the Ecobase project, Latvian landowners can not only gain a financial benefit but also actively participate in greenhouse gas reduction and climate protection. The carbon compensation mechanism allows linking private benefit with the public interest. This represents an investment in your own prosperity as well as the future of the entire planet. Participation in such a program is a clear step toward a more sustainable world.

SIA Palus provides full support throughout the entire process, from initial consultations all the way to the sale of the carbon credits. The primary goal is to make project participation accessible to every forest owner interested in opportunities to receive additional income. We invite you to learn about carbon farming and the possibilities for achieving climate goals together with Palus. We will help you understand all the nuances and find the best solution precisely for your situation, providing professional support at every project stage.

 

Why choose Palus as a cooperation partner in the carbon credit market?

By signing an agreement and joining the EcoBase project, you benefit because:

  • Economic activity and owner decisions are not restricted, as both withdrawing from the project and timber harvesting are permitted at any time.
  • The forest owner bears no additional bureaucratic burden or reporting duties, except for providing a tree felling notification and submitting the State Forest Service database file once a year.
  • The financial balance remains positive in any situation, and the forest owner faces no financial risks even upon withdrawal, because previously earned credits are retained.
Water drops on pine needles, forest ecosystem.