European Forestry Pulse #68 🌲

Hello,

Here's a question nobody at Mastercard, BlackRock, or Philip Morris wants to answer.

Why did you buy carbon credits from a project under review?

The Pacajai REDD+ project in Brazil's Amazon has been on hold since September 2023. Verra — the world's largest voluntary carbon credit registry — issued a review notification letter and placed the project on hold. Land rights remain unresolved. And yet, three of the planet's most recognizable companies still claim offsets from it.

Here's what's moving European forestry this week:

Mastercard, BlackRock, and Philip Morris International have claimed carbon offsets linked to the Pacajai REDD+ project in Brazil's Amazon rainforest. The project is registered with Verra as VCS Project 981. It has been under review since September 2023.

The issue: land rights.

Verra's registry lists the project status as "On Hold — see notification letter." A review notification was issued in September 2023. That's over two years ago. The review has not been resolved. But credits already issued before the hold can still be traded and retired. Companies can still claim them as offsets.

The Pacajai project was designed to prevent deforestation in a specific area of the Amazon. It generated carbon credits based on the assumption that without the project, those trees would be cut down.

But questions about who actually holds the land rights surfaced years ago. Verra opened a formal review in September 2023 and placed the project on hold. More than two and a half years later, the review has not been resolved.

Meanwhile, the credits kept moving. Companies kept buying. And nobody asked the obvious question: should you offset your emissions with credits from a project that can't prove who owns the land?

European forest carbon is building credibility. The EU Carbon Removals Certification Framework (CRCF) launched in late 2025. It sets standards that voluntary markets never had. European forest projects operate under stronger governance than most tropical projects.

But credibility is fragile. When Mastercard and BlackRock — companies that set the tone for corporate climate action — buy credits from projects on hold, it damages trust in carbon markets everywhere. Including yours.

The signal to European forest carbon developers: your higher standards are your competitive advantage. Don't let them slip.

If you develop forest carbon projects: This is your marketing story. European governance, transparent registries, and verified land ownership are worth more than a cheap credit from a tropical project on hold.

If you buy carbon credits: Check the project status before you buy. Verra's registry is public. A two-minute search could save your company from a PR disaster.

If you advise on ESG strategy: The Pacajai case shows that "Verra-registered" is not the same as "verified and trustworthy." Due diligence on individual projects matters more than registry labels (I can help you with that, see below). Sources: Wall Street Journal — A Carbon Project in the Amazon Is Under Investigation | Lesprom Plus — Mastercard, BlackRock and Philip Morris Claim Offsets | Verra Registry — Pacajai REDD+ Project, VCS 981

Canadian lumber production fell 5% in 2025. The decline steepened in Q4, with output dropping 9% year-on-year in October to December. December alone was down nearly 13%.

Why it matters: Canada is the world's second-largest lumber exporter. When Canadian mills cut production, global supply tightens. European exporters competing for the same markets — especially the US — benefit from reduced Canadian volumes.

The context: This comes alongside Canada's C$500 million forest retooling fund (covered in EFP #65). The government is investing in modernization while production falls. The signal: Canada is preparing for a different forest industry, not just more of the same.

The takeaway: If you export to markets where Canada competes, watch Q1 2026 production data. The decline may be structural, not cyclical. Source: Lesprom — Canada Sawmills Cut Lumber Production 5% in 2025

The Court of Session in Edinburgh ruled that Scottish Forestry acted unlawfully. The agency failed to require an Environmental Impact Assessment (EIA) for a 579-hectare woodland creation scheme near Hawick. The proposed planting included 243.7 hectares of Sitka spruce.

Why it matters: The ruling by Lady Poole found that Scottish Forestry did not properly assess whether the planting would harm the northern brown argus butterfly — a priority species. The case was brought by Restore Nature Ltd.

The European signal: This raises the bar for EIA screening of new planting projects in Scotland. If you're planning large-scale woodland creation in the UK, expect more scrutiny on biodiversity impacts.

The takeaway: Planting trees isn't automatically "green." Where and what you plant matters. This ruling says agencies must prove they've checked. Source: Court of Session — 2026 CSOH 17 | STV News — Scottish Forestry Acted Unlawfully

Finnish harvester manufacturer Ponsse launched OptiFellingAssist at the beginning of March. It's the first felling assistant built by a forest machine manufacturer.

How it works: The system works with Ponsse Active Crane and Opti 5G 3.3 software. After the harvester head grips a tree, OptiFellingAssist automatically pre-tensions the tree. This prevents the saw bar from getting pinched during the cut.

Why it matters: Pinched saw bars waste time and damage equipment. In deep snow or difficult terrain, the problem gets worse. Ponsse says the system improves operator safety, reduces chain and bar wear, and lowers boom stress.

The takeaway: Forest machine automation is moving from research labs to the cab. If you run Ponsse harvesters with Active Crane, check whether your software version supports this. Source: Forest Machine Magazine — OptiFellingAssist from Ponsse | Metsätrans — Ponsse Launches OptiFellingAssist

Russian sawmills are receiving retroactive forest lease recalculations for 2024 and 2025. The bills reportedly run into billions of rubles. This comes on top of weakening exports and high borrowing costs.

Why it matters: Russia was once Europe's biggest wood supplier. Sanctions changed that. Now Russian mills face a domestic crisis: falling export revenue, expensive credit, and a government clawing back lease payments.

The European angle: Less Russian production means less competition on global markets. But it also means less supply flowing to China — which could redirect Chinese buyers toward other sources, including European exporters' competitors in the Southern Hemisphere.

The takeaway: Russia's forest industry is under pressure from every direction. That pressure won't ease soon. Source: Lesprom Plus — Russian Sawmills Face Billions in Retroactive Forest Rent Bills | Wood Central — Russia Blindsides Mills with New Rent Bills

Check the status of any carbon credits your company holds — or plans to buy.

The Verra registry is public. So is Gold Standard's. Two minutes of searching can tell you whether a project is active, suspended, or under review.

Ten minutes:

If you're developing a forest carbon project, do the same exercise in reverse. Check competing projects in your registry. Know what you're being compared to.

The voluntary carbon market is cleaning house. Make sure your credits survive the sweep.

European forestry needs better communication and smarter capital. We deliver both.

Intelligence: EUDR compliance, timber market analysis, carbon market monitoring, forest investment due diligence.

Communication: Content strategy, trade publication articles, stakeholder messaging, staff training. Three languages: EN | DE | HU.

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Until Thursday!

Wish you all the best: Peter

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