The voluntary carbon market and carbon credits are new in Latvia. They are talked about and mentioned. The complexity of the process, which we also discuss in this interview, often leads to peculiar thoughts about trading “empty air” or the desire to “keep polluting elsewhere” at Latvia’s expense. Here are a few simple questions about a current topic.

The first question I want to ask, heard more than once – the voluntary carbon market – so you and your colleagues want to sell someone clean air.

I do indeed hear this question often enough. A sense of humour comes in handy at work; sometimes when I am asked what I do, I joke: “I sell air,” and after a pause, I continue: “No, no, that’s not it!”

There is a grain of truth in the question and the joke, because the first thing that comes to a person's mind when hearing about carbon credits is that it is about air. I would say this: we sell the landowner an opportunity to do something for nature. What does the owner do and what can they do? Grow a forest on land where there has not been one before. And that is “not air” – it is a specific place, trees, timber – things we can see and touch.

Of course, we also engage in sales and services to have a certain client base, but an equally important part of our work is education – articles, interviews, expert opinions, which invite people to delve deeper, show interest, read, etc.

Why is this process called a carbon credit?

I have learned to look at the situation both from the perspective of the landowner and the buyer (the one purchasing the carbon credit) – the answer to the question must be clear to both parties. From the buyer’s perspective, a carbon credit is what, for example, their factory emits into the atmosphere; from the landowner’s perspective, it is an opportunity to help compensate for what has ended up in the atmosphere.

Not far from where we are talking there was once a Riga Radio Factory. Imagine: the factory owner concludes that their production facility is polluting the environment; they just need to find, for example, three owners of young stands and agree on cooperation. Is that it?

...Nowadays, it is not that simple. There are credit certifiers, verifiers, and credit issuers, such as large and globally known companies like “Verra” and “Gold Standard”. They create a methodology that project developers (in the case of Latvia, Estonia, Lithuania, and Finland – us) follow and adhere to in order to create high-quality credits. The aforementioned companies (and others) approach us or look for other entrepreneurs so that these credits can be bought.

Credit buyers usually do not approach the landowner directly, although there are exceptions. There are several steps and several participants in the credit purchasing system.

“It is not that simple”. Why must the system necessarily be complicated?

That is a good question, and it can be answered briefly – the necessary bureaucracy is there to ensure that everything is done correctly, that no one cheats, and that the credits truly do something good for nature.

That would be clear, but bureaucracy is born in some minds. For example, there is and will continue to be the European Green Deal. I haven't met a single owner of land, forest, field, or bog who objects to the ideas of the Green Deal. However, as soon as this truly responsive person receives “several kilograms” of documents and requirements, objections arise; they are justified and there are many of them. The idea and a detailed description of its implementation do not always go hand in hand. In Latvia, bureaucracy has exhausted many; even high-ranking politicians admit that it will not be easy to deal with, or that it is not even known how. Why invite people to engage in a new and complex process?

You asked that well again – that is why we exist, to take on a large part of the bureaucratic procedures so that the owner has to do as little as possible.

How necessary are all the requirements and their fulfilment?

Documentation is an important link between project developers and credit issuers, such as the already mentioned company “Verra”. It ensures transparency and the observance of honest principles.

Our task is to prepare a contract with the landowner that complies with the Forest Law and does not violate specific requirements, so that problems do not arise for the credit issuer – namely – a credit exists, it has been issued, but in the end, it is “lost”. How can that happen? For example, the owner participates in the project, grows a forest, they have a 40-year-old birch stand and... suddenly the owner “fells” it all in a clear-cut and does not replant it. In any case, that is a loss – for both the owner and the company (“Verra”) – as well as a violation of the law. Bureaucratic regulation is needed so that everyone involved is “on the same wavelength” and someone does not decide to act as they please.

Do carbon credits and involvement in such projects not mean a prohibition on economic activity? The owner can manage their forest; the only thing they have to think about is ensuring that the forest is preserved or renewed.

There is no prohibition on economic activity in connection with credits; agrotechnical maintenance and thinning are allowed, except for final felling – that is permitted only when the project has ended. For example, “Verra” representatives take this sequence into account – if a forest has been planted and is growing in a place where there was none before, it is clear that there will be a forest there in the future too, and if it is felled, it will need to be replanted.

Are there many free land areas in Latvia that could be afforested? In agriculturally active regions, one must queue for good land. There was a time when we heard that the forest market in Latvia was quite poor; in recent conversations, representatives of the company “Stiga RM” emphasised that this is by no means the case in Kurzeme. Do we have many hectares to afforest?

I cannot give you exact numbers, but there are. For example, areas that are overgrown with bushes. Looking at our company’s activities, so far in the Baltics, we have secured about 1300 ha for afforestation. In Estonia, I could answer your question more precisely because it has been calculated – they have 170 thousand hectares of land that can be afforested; in Latvia, there are no such calculations yet.

Land areas also belong to the public sector; is it possible, for example, to cooperate with local governments in terms of carbon credits?

That depends on the country we are talking about. I know that in Finland, local governments have reached out for possible cooperation; in Latvia, that has not happened yet. I do not know the reason.

Many local governments that own forests employ professionals who are responsible for them.

Back when I worked at the State Forest Service and collaborated with local governments, I often had to emphasise to representatives of local authorities that if a district or city owns forests, a professional is needed for their proper maintenance and management. As can be seen, the situation has started to improve.

If you happen to drive along one of Latvia’s highways, by the side of which bushes have grown lushly, and in your mind you already see a forest where, for example, spruce and beech live together perfectly. How simple is it to explain to the owner of that specific land that bushes are not the best thing to grow on their land? Who deals with the practical things?

The landowner deals with practical issues. Our duty is to do everything necessary so that the relevant area can be included in the project.

It is not overly easy to speak directly with owners of brushwood or overgrown areas, so, as I mentioned before, we educate and explain the situation; people – including landowners and brushwood owners – notice this information, and if they become interested in talking to us, the process begins. If there is interest, the further solution is not complicated. If there isn't... then there isn't. It is as simple as that.

Does previous experience and knowledge at the State Forest Service give any advantages in understanding where there is and where there is not potential?

Experience and knowledge are useful. We do have our own digital data tool where, by entering the cadastre number, one can see whether the relevant land area is suitable for the project or not.

300 ha of land in Latvia – how much is that from the perspective of carbon credit plans?

That is a start, that is the first year of work. We have been on the market since March of last year, when the company was founded; we started work in Latvia in September 2022. ...a little more than a year.

How is it going explaining this – namely – you, owner, will be able to grow the forest as before and you will get something more for it...

Everything depends on the interlocutor, who is listening and how they are listening, their prior knowledge, and openness to new knowledge and experience.

What else does the forest owner get specifically? The bushes are cleared, the soil prepared, the new forest planted, two years have passed... Someone arrives for an inspection, everything is in order, the little trees are growing. Several people are involved in the process who are very interested in the forest growing in this place...

Both... and... Interested are those who would like to buy credits sometime in the future, paying for future potential now, as well as those who buy credits when they have been issued. The first verification of the afforested area is carried out in the fifth year – an inspection of the area, carbon measurement (how much carbon has been sequestered during this time), and based on the result, carbon credits are issued. That continues every five years. The benefit for the landowner is timber; carbon credits are an added value.

Consequently – if an agreement on participation in a credit project took place in 2022, until 2027 the owner calmly oversees the forest, maintains it if necessary, and lets it grow.

What is the benefit of participating in a credit project? You can plant a forest even without it... What is the difference?

For example, if you plant birch that will grow for 60 years, without a plan to obtain timber, the owner could additionally earn €10-12 000 over that 60-year period, receiving a certain amount every 5 years.

So in 2027 the afforested area is assessed and measured in various ways and the owner will get a certain amount of money for it because after 5 years there will be no timber yet.

Exactly!

What happens, for example, in the case of a hurricane or a bark beetle infestation?

The trees are lost, that must be reported, the forest must be restored in any case; when that happens, the process continues.

What about the chosen species?

We strictly follow what is set out in the Forest Law; it has a list of species to be renewed, those can be planted, there is no talk of others. Our data tool suggests a potential species based on soil data. We also base potential income from carbon credits on this information. However, the final decision is made by the owner themselves. Of course, if necessary, we consult the landowner.

Concerns have been heard that Latvia could be turned into a reserve, or other concerns are voiced from time to time that polluting industry giants in Switzerland and Germany, who have plenty of money, will buy carbon credits in Latvia, “lay a paw” on our forests, and... nothing will happen in the forests anymore.

I have heard such talk often enough. I will not be precise with the reference, but I recently read a study that it is more likely that more environmentally friendly activities and practices will be introduced in production by those who purchase carbon credits, compared to those who do not participate in the voluntary carbon credit market. Those who purchase credits do everything in parallel to ensure that in the future they have to buy less, i.e., they change the principles of their operations.

So, in fact, the possibility that forestry and the timber industry in Latvia will stop precisely because of carbon credits is close to zero – the talk about it is not grounded.

There is no basis for them.

Regarding the already mentioned Green Deal. In Latvia, at least publicly at an official level, absolute enthusiasm is visible, which wanes as soon as practical, important questions are asked. Even referring to what we talked about – you can set up a tent next to the bushes and marvel every day at what kind of forest could grow here if the bushes were cleared, but... without work, nothing will change.

The goal of the Green Deal is to reduce CO₂ levels in the Earth’s atmosphere; our goal is the same. Where do I see the problem? It is not clear, and I assume it is not clear to anyone how this could be done by the state, how state policy could be shaped (and this is not only about Latvia). Not so long ago, it was said on television that new forests should be planted in place of old forests...

...which is effectively a draft pulled out of nowhere. A professional in the forest industry cannot take this seriously!

Exactly! That will be the other extreme... Afforestation is one of the ways to reduce the amount of carbon; by using wood in construction, we will store carbon for an even longer time. Of course, we will not solve all problems with forests alone; many other things must be done, other technologies must be used. But – you have to start somewhere. Of course, those habits of life, living, and daily routine that are directly dependent on humans must be changed...