Carbon Plantations Debenture 1

What does the company do?

Carbon Plantations is helping farmers convert previously intensively farmed agricultural land into hardwood forestry plantations. The company is taking a new approach by planting fast-growing Phoenix One® hardwood trees, a non-invasive variety of Paulownia, supplied by WeGrow CropTec GmbH, who have been producing varieties of Paulownia successfully since 2009.

The company typically leases land from a landowner under a long term lease and then manages the process of planting the trees, managing the woodland and then harvesting the trees when ready. The planting areas are chosen and refined through significant Environmental Impact Assessment work and stakeholder engagement.

The company’s income is derived from the sale of timber as well as the sale of carbon credits. The timber produced is strong and lightweight, providing a source of high value, sustainable UK-grown timber that can be used in place of slow-growing species such as oak, with applications in light construction and furniture making. The woodland project also qualifies for carbon credit payments under the Woodland Carbon Guarantee Scheme run by the Forestry Commission, which is intended to promote the planting of new woodlands in England.

Why did the company raise money?

This was Carbon Plantations’ first investment on Abundance. The money raised by this investment was used to fund a 195 hectare plantation on the Euston Estate in Suffolk. The land used had traditionally been used for root crops such as sugar beet and potatoes in a 6-7 year rotation.

The trees were planted in 2022 with the first harvest expected after 6 years, and then every 9-10 years.

How does the company expect to repay the investment?

Carbon Plantations expects to repay investors either through the revenue earned from timber sales and carbon credits, or refinancing the debt by raising funding from other sources.

How is the company making an impact?

Carbon Plantations aims to provide the wood needed to build and live sustainably, while helping to regenerate our soils and boost biodiversity. Trees can help mitigate climate change by reducing the amount of greenhouse gases in the atmosphere. They do this by absorbing carbon dioxide through photosynthesis, using the carbon to produce sugars for tree growth and releasing the oxygen back into the air. As trees grow, they store carbon in their leaves, twigs and trunk, roots and in the soil around them. This capture and storage of carbon in soils and trees is a natural way of sequestering carbon. The sustainable timber will be sold, enabling the carbon to be locked up not only during the tree’s growth but also during the time that it is used for hardwood applications such as in furniture or construction materials.

The Phoenix One® hardwood trees are fast growing — up to 4m a year — which means they absorb carbon dioxide up to seven times faster than newly planted native woodland and will be sustainably harvested by coppicing. As well as absorbing carbon, this project also offers a range of other environmental and biodiversity benefits. As deciduous trees they will allow an understorey of biodiverse plants to develop supporting insects (including bees and other pollinators) and other wildlife. And because they will be planted on formerly intensively cultivated land, the trees will help regenerate and improve the soil structure. 15% of the land is planted with new native woodland, with 14% open grassland sown with a nectar and wild bird-friendly seed mix to encourage biodiversity.