Rewilding and carbon credits: a new income stream for landowners

Sustainability has moved firmly to the top of the agenda for businesses and governments alike. With net-zero targets placing increasing pressure on organisations to reduce their environmental footprint, many are turning to carbon credits as a means of offsetting UK-based emissions that cannot currently be eliminated through operational changes. This shift is driving the emergence of natural capital as a significant asset class and fuelling a growing market for new 'green' investment vehicles.

For landowners, this represents a significant and evolving opportunity to diversify income streams while simultaneously protecting and enhancing the natural environment through increased biodiversity, landscape conservation, and improvements to water quality. 

What are carbon credits? 

Carbon credits (or units) are tradeable instruments, each representing the removal of one tonne of CO2 from the atmosphere. In the UK, credits are currently trading at between £25 and £35 per unit on average.

The scale of this opportunity is substantial. A report published in April 2026 by the City of London Corporation and the UK Carbon Markets Forum, 'Seizing the UK's Carbon Credit Opportunity: Measuring Value to Enable Action' found that carbon credits contributed £1.2 billion to the UK economy in 2025, with global investment into UK carbon projects reaching $3.5 billion between 2023 and 2025. These figures underscore the growing confidence of international investors in the UK's carbon market and signal a significant income opportunity for UK landowners.

Available schemes 

At present, two principal schemes are available to landowners in the UK seeking to generate carbon credits:

1. Peatland Carbon Units (PCUs) - verified under the UK Peatland Code; and
2. Woodland Carbon Units (WCUs) - verified under the UK Woodland Carbon Code. 

Peatland Carbon Code

The Peatland Carbon Code allows landowners to generate carbon credits by restoring drained or degraded peatland.

Restoration can be carried out over a period of two years. Once restoration is complete and provided that the validation process takes place within one year of finishing the restoration, Pending Issuance Units (PIUs) are issued. The first formal verification occurs at year 5 of the project, and then at least every 10 years thereafter. At each verification point, PIUs convert into PCUs. 

Woodland Carbon Code 

The Woodland Carbon Code allows landowners to generate carbon credits by planting and managing new woodland.

Once trees are planted and the project is verified, PIUs are generated. These carry a vintage timestamp indicating the future date on which they will convert into WCUs, once the trees have matured and carbon sequestration has been formally calculated.

Woodland carbon code schemes run for between 35 and 100 years and a native woodland can generate approximately 400 units per hectare over the lifetime of the project. 

Woodland carbon guarantee

Introduced in the 2018 budget, the woodland carbon guarantee is an additional scheme available for woodland planting in England only. It provides an option to sell verified woodland carbon units to the government at a guaranteed index-linked price until 2055, whilst landowners retain the flexibility to sell privately should market conditions prove more favourable.

The scheme is currently closed to new applicants, though existing participants are unaffected. The government may look to build on the success of these initiatives by introducing further incentives or developing comparable schemes in the future.

Understanding PIUs 

Pending issuance units are an important feature of both schemes. While PIUs can be sold before full verification, buyers must wait for their conversion into verified carbon credits before using them for offsetting purposes. 

The market for PIUs is nonetheless active. There are currently upwards of 200 woodland projects selling PIUs, compared with around 8 projects selling verified WCUs, a reflection of the long timeframes involved in carbon sequestration but equally the significant demand from buyers willing to forward-purchase credits.

Importantly, both schemes involve long-term land management commitments, and the establishment costs associated with peatland restoration and woodland creation can be considerable. The ability to sell PIUs in advance of verification provides landowners with early access to capital, helping to offset those costs and improve the financial viability of a project. 

A growing market: Emblehope Estate

The commercial appeal of these schemes is illustrated by the recent acquisition of the 7,500-acre Emblehope Estate in Northumberland by Restore, a natural capital investment company. Purchased from the Kennel Club and dedicated to large-scale rewilding and habitat restoration, the project is set to become one of England's largest ever landscape restoration projects and will include 800 hectares of peatland restoration projects over the next 30 years. The project is targeting an annual rate of return of approximately 10%, illustrating how environmental restoration can create substantial commercial value from moorland that was previously considered to have limited agricultural or economic potential.

Advice for landowners

Carbon credit schemes often involve long-term commitments and complex contractual arrangements. Landowners considering entering into such schemes should seek legal advice before doing so.

In particular, it is important for landowners to understand:

• the rights granted to buyers under any carbon credit sales contract;
• any restrictions on land use that will apply during the lifetime of the project; and
• any obligations that will run with the land and which may affect future sales, value, financing, or other dealings with the property.

Considering these matters at the outset is essential to ensuring that the scheme delivers its intended commercial and environmental benefits over what may be a period of several decades.