Germany considers paying land owners “tree premium” for emissions reduction

Germany’s government is considering paying forest owners for providing a natural carbon sink, writes Bernhard Pötter in tageszeitung (taz). The federal government is working with the states on giving landowners a “tree premium” in return for their “ecosystem service”, a concept that could cost taxpayers up to 1.5 billion euros per year, writes Pötter. Forest owners have previously called for a government “tree premium” to help them offset the rising costs of maintaining drought-damaged woodland and falling wood prices. A year ago, the German Forest Owners' Association (AGDW) mooted a payment of 125 euros per hectare of forest per year, based on the fact that an average of 5 tonnes of CO₂ are stored per hectare of forest per year and a tonne of CO₂ is worth about 25 euros in the European Union Emissions Trading System (ETS). German forests swallow about 60 million tonnes of CO₂ every year, while the country emitted a total of about 805 million tonnes CO₂ equivalents in 2019. Environmental groups such as Greenpeace support the concept, arguing that it creates incentives to limit tree felling. But others are sceptical, with environment minister Svenja Schulze saying that such a system would be complicated. For example, it would be dificult to say what will happen if a farmer burnt down an area of forest that had previously received a tree premium, Schulze said. Researchers also point out that forested areas are in decline and that they play only a minor part in carbon storage, certainly not enough to play a major part in meeting Germany’s climate targets. 

Reforestation has become an important issue in Germany as prolonged droughts have begun to take their toll on the country’s biggest ecosystems. Billions in damages have been paid to forest owners to protect the carbon sink in recent years, and Chancellor Angela Merkel has described reforestation as “a great task” for Germany’s climate and energy fund.