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Una Mullally: Who gets the carbon credits generated by Coillte’s controversial deal?

Privatisation of forestry raises serious questions about this increasingly valuable asset

One of the overlooked aspects of the Coillte deal with a British investment fund manager, Gresham House, is what happens to the carbon credits generated by the agreement. People are right to be outraged by the selling off of land and the commodification of forestry. But it is not just the land and the trees that are the assets. Another valuable asset is carbon credits.

The climate emergency is increasing demand for carbon credits. To meet emissions targets countries that aren’t capturing enough carbon at home have to buy carbon credits on the international market. Ireland does this. Up to 2019 the State spent €121 million purchasing carbon credits. Gresham House’s UK-focused forestry fund, for example, will pay investor distributions in verified carbon credits, which investors can then retain or sell.

There are two broad carbon credit markets: compliance (for entities legally bound by emissions targets) and voluntary (where entities can purchase credits voluntarily, and a lot of businesses striving to be “carbon neutral” do so). In New Zealand, for example, where Gresham House has invested in forestry – expecting nine million carbon credits to be generated in 25 years – forestry is permitted to generate carbon credits for the compliance market. In Australia and the UK existing forestry goes toward those countries’ national carbon capture, but new forestry can generate carbon credits. In the EU, our carbon credit market, the EU Emissions Trading System has not yet expanded to include forestry.

This is not just a green area, it’s a grey one. To ensure Ireland can count all of the carbon capture from forestry in our national targets long term, we have to maintain ownership of our land, including forestry. If, in the future, a private forest is generating carbon credits through a certification scheme assessing and converting its carbon capture, how do we know the State can include that in its climate targets? We don’t. Coillte does not have a crystal ball. They cannot tell who will own carbon credits from private forestry, considering a system is not in place. But we know that carbon credits are a valuable asset. It does not make sense, therefore, to sell off land for private forestry before knowing who will be able to claim any carbon-related assets in the future.


Carbon capture and carbon credits were largely absent from Coillte and Gresham House’s communication on the Irish deal. They spoke about afforestation targets. Simultaneously, the global carbon credit market is exploding. In 2017-2019 it grew fivefold in value. Voluntary carbon credits are generally bought by carbon credit traders, who sell them on to clients. Gresham House states in its own literature: “Investors in forestry have the potential to capture a return by generating and selling carbon credits which businesses can buy in order to meet their carbon emission targets ... Carbon credits generated from forestry offer the potential for long-term and high cash yielding returns, underpinned by demand from large and stable corporate entities for carbon credits each year.” For those confused as to why investment funds are getting into trees, that offers a partial answer.

In September 2021 the Minister for Agriculture, Food and Marine, Charlie McConalogue, angered farmers during an Irish Farmers Journal webinar when he said those who planted forestry on their land with State funding do not own the carbon credits, nor can they sell them. But then came a lack of clarity with regards to forestry planted without State funding – as in private forestry. At the time the Farmers Journal reported that McConalogue said there would need to be a discussion as the “situation emerges and evolves”.

When the Minister was asked about this the following month in the Dáil, he said that while forestry is not part of the EU Emissions Trading Scheme, “there is potential for some trading of forestry-generated carbon on voluntary markets which does take place in other countries mainly for corporate social responsibility for businesses rather than for mandatory compliance ... My department is at the early stages of exploring opportunities for the development of such a voluntary carbon market in Ireland. This would look at encouraging reductions in emissions and at the same time develop a potential alternative source of income for landowners and foresters.”

The Government needs to clarify what the privatisation of forestry means in terms of carbon sequestration and carbon credits. On EU certification of carbon removals, the European Commission has stated: “practices such as forest monocultures that produce harmful effects for biodiversity should not be eligible for certification.” What does that mean for Coillte?

In December Coillte’s chief executive Imelda Hurley won Businessperson of the Year at the Business and Finance Awards. And for investment funds, it turns out money may indeed grow on trees. But have we disconnected from nature so profoundly that that’s all they’re for? Selling off land and commodifying forestry is obviously at odds with people’s desires in Ireland, a country where our first written language was an alphabet of trees. Whatever about Fine Gael and Fianna Fáil, that this is happening under the Green Party in Government is astonishing.