ForestryBrief Professional #3 🌳💰

Series Overview: The Carbon Credit Investigation

A 4-Week Journey from Confusion to Clarity

Over the next four weeks, ForestryBrief Professional will dissect Europe's forest carbon markets with unprecedented transparency. This isn't another guide promising easy money from trees. It's an investigation into why a market supposedly worth billions delivers so little to the forests actually storing the carbon.

What This Series Delivers:

By October, you'll understand:

This series is for:

In this first installment, we trace what happens to every euro between corporate buyer and forest floor. The journey will take us through certification bodies, aggregators, brokers, and platforms - each taking their cut from what was meant to incentivize sustainable forestry. You'll discover why European forests produce just 0.04% of global carbon credits despite covering 35% of the continent. More importantly, you'll understand the mathematics that make forest owners walk away.

Disclaimer: This analysis covers the voluntary carbon market only. Compliance markets (e.g., EU ETS) operate under different rules and pricing structures and are not included in this assessment.

The numbers tell a brutal story that no one in the carbon credit industry wants you to hear.

When a corporation pays €1,000 for a forest carbon credit in Europe, the forest owner who spent decades growing those trees receives €200-250. The remaining €750-800 disappears into a byzantine system of intermediaries, verifiers, brokers, and platforms—each taking their cut from what was supposed to incentivize sustainable forestry.

This isn't speculation. It's the mathematical reality documented by Carbon Market Watch, Winrock International, and academic research across European carbon projects.¹

Here's what should alarm every sustainability officer in Europe: European forest projects struggle to compete in global carbon markets, producing a tiny fraction of available credits despite the continent's vast forest resources covering 35% of its land area. The supply shortage isn't due to lack of forests—it's due to economics that don't work for forest owners.²

The standard explanation—pushed relentlessly by carbon market platforms—is that European landowners simply don't understand the opportunity. They need more education. More webinars. More consultants.

The truth is far simpler and far more damaging: European forest owners understand the mathematics perfectly. They've done the calculations. And they're walking away.

Before we follow the money, let's establish what we're actually talking about.

One carbon credit represents one metric tonne of CO₂ removed from or prevented from entering the atmosphere.

Visualize it this way: One tonne of CO₂ gas would fill a cube 8.2 meters on each side - about the size of a small house. That's what your forest needs to sequester to generate one credit. In practical terms: It's the emissions from driving an average car 4,000 kilometers, or a round trip from London to Istanbul.

A typical European forest sequesters 5-10 tonnes of CO₂ per hectare annually, depending on:

Simple calculation:

But that's before the reality we're about to explore hits.

Voluntary vs Compliance Markets - Two different worlds:

This price gap exists because compliance credits are required by law, while voluntary credits are optional corporate purchases. Guess which market has more negotiating power?

Understanding buyers helps explain the pricing paradox.

Verified Major Purchasers (2024 data):

Corporate purchase data compiled from multiple industry sources including AlliedOffsets, Trellis, and company sustainability reports. Price ranges reflect 2024 market transactions and stated targets.

Three motivations drive 90% of purchases:

After analyzing corporate purchases, buyers consistently prioritize:

European forest credits should check every box. Yet they represent less than 1% of corporate purchases. The reason becomes clear when you understand what happens between forest and boardroom.

Research by Carbon Market Watch reveals that intermediaries typically charge 10-30% fees at each level of the value chain. Winrock International's analysis of forestry projects found transaction costs can reach 70-270% of project income.³ Here's how it breaks down in practice:

The Certification Cascade: According to 2025 fee schedules:

Even with Gold Standard's lower fees, a 1,000-hectare project faces €25-45 per credit in costs before any revenue is generated.

The Distribution Chain: Forest Trends research documents:

By the time all intermediaries take their share, Penn State Extension research confirms forest owners typically receive $6-280 per acre annually—a fraction of the credit's market value.⁷

Shell retired 14.5 million carbon credits in 2024 at an average of $4.15 per credit, with the majority from nature-based solutions including forestry projects.⁸ Microsoft, positioning itself as a premium buyer, paid an average of $189 for carbon removal credits in 2024⁹—yet even at these premium prices, the fundamental problem persists: paying more doesn't mean forest owners receive more. It just means more intermediaries join the feast.

This creates a perverse incentive structure documented across the industry: the more a corporation is willing to pay for quality credits, the more middlemen materialize to capture that premium.

Shell's 2024 procurement data reveals approximately 78% of their nature-based credits come from tropical regions (estimated based on industry patterns). Meanwhile, European forest owners—managing some of the world's most productive temperate forests—can't make the economics work.

The reason isn't forest productivity. A hectare of managed European forest can sequester comparable CO2 to tropical forests. The difference is overhead and regulatory burden.

Academic research shows tropical projects operate with:

The result: tropical projects can deliver credits profitably at lower prices, while European projects struggle even at premium rates.

Every carbon market conference features panels on "unlocking supply" and "engaging landowners." Nobody mentions the 80/20 split that defines the market: up to 80% of revenue to intermediaries, 20% to forest owners.

This isn't a bug. It's a feature.

The certification bodies argue their fees ensure quality. The brokers claim they provide liquidity. The platforms insist they enable price discovery. Each participant can justify their individual fee. Collectively, they've created a system where the actual carbon sequestration—the forests themselves—becomes an afterthought.

You now understand why European forests produce 0.04% of global carbon credits despite covering 35% of the continent. The mathematics are brutal: €750-800 of every €1,000 disappears before reaching the forest floor.

But here's what separates the 5% who succeed from the 95% who fail: They know how to game a broken system.

The free preview ends here. Because knowing the problem is worthless without knowing the workarounds.

Behind this paywall, you'll discover during the 4-part series:

Plus: Interactive calculators that model YOUR specific situation, not hypothetical averages. By becoming a ForestryBrief Professional subscriber you get the already published EUDR series as well as every upcoming deep-dive. Cancel anytime if you don’t like it. Backed by 5 ironclad guarantees.