Traditional forestry brings owners direct income from the sale of wood. Average prices of standing wood in Slovakia are in the order of tens of euros per m³ (e.g. hardwood ~55 €/m³, softwood ~44 €/m³). With a useful yield of approximately 4–6 m³ of wood/ha/year, this represents approximately €150–300/ha per year from logging. However, carbon credits (each 1 t CO₂) add another revenue opportunity. On the voluntary market, credits reached an average price of around €30–50 per tonne in 2024. If a forest binds 3–6 t CO₂ per ha per year, the income from credits would be approximately €90–300/ha/year at this price. According to experts, credit prices are expected to increase (e.g. double after the introduction of the CRCF certification framework).

Table 1 compares examples of the main quantities: traditional logging vs. forest protection with the generation of carbon credits. The above amounts are indicative - they really depend on the quality and structure of the forest, the price of wood and carbon, as well as legislative conditions.

Long-term sustainability and climate risks

Climate change is putting high demands on the stability of forest stands. Traditional management with high wood use can be vulnerable to extremes – drought, fires, pests and storms. The study warns that costs from heat and disasters in the European timber sector could increase from the current €115 billion to up to €247 billion under unrestricted climate change, with Central Europe suffering losses of up to ~€19,885 per hectare. This means a reduction in the value of timber in stands of up to 42 %.

Forest protection in the form of reduced logging and increased afforestation, on the other hand, increases carbon accumulation and improves the climate resilience of the ecosystem. The scope of framework strategies (e.g. EU COVID-19 recovery) supporting nature-based solutions, forest ecosystems sequester CO₂ and stabilize the landscape. The new EU certification framework (CRCF) favors sustainable carbon sequestration in soil and wood. On the other hand, it requires additionality – forest protection must go beyond routine duties. Experts also point out that one-off measures (e.g. planting trees without a long-term plan) may be effective in the short term, but long-term sustainability requires comprehensive climate management of forestry.

Legal and political framework in the EU and Central Europe

The European Union has set a new deadline for the end of 2024 voluntary certification system (CRCF) for carbon removals and farming (EU Regulation 2024/3012). This framework introduces qualitative criteria (measurability, environmental friendliness, „no harm“, biodiversity targets) for the verification of projects sequestering carbon in soil, forests or products. It also supports investments in permanent carbon capture technologies and agroforestry practices, including the revitalization of wetlands or agroforestry. At the national level, this framework means that public and private forest owners can have sustainable forestry projects certified and sell credits internationally and on the European market.

But for now Member States to the mandatory emissions trading system (EU ETS) they do not want to include forest credits – forest removals are explicitly excluded until 2030. There is still discussion about whether they could be included in the system after 2030 (experts assume that this may come later). Nevertheless, the EU is currently pushing for the use of market demand mechanisms – for example, new rules Corporate Sustainability Reporting and taxonomy for finance increase the demand of companies for carbon neutrality projects. In Hungary, for example, experts urge forest owners to wait for the approved CRCF methodologies before investing in carbon projects, and estimate an increase in credit prices. Furthermore, there is the possibility of financing through European subsidies (e.g. from CAP or EU Innovation) for projects to increase CO₂ removal in the forest sector.

Impact on biodiversity and ecosystem services

From a biodiversity perspective, forest protection and passive management are generally considered more favorable than intensive logging. Forests preserved without logging have a richer submontane range, a higher proportion of dead wood, and lighted crowns support a higher species diversity of fungi, birds, and insects. However, experts warn that even maximizing carbon storage can be dangerous: policies aimed only at increasing biomass in highly productive monocultures can lead to homogeneous stands with lower biodiversity. Conversely, promoting dead wood and diversity of stands, both carbon capacity and species richness can be increased.

Forests also provide other ecosystem services: water retention, soil protection against erosion, stabilisation of nutrient cycles and recreational value. For example, the pilot project for certified sustainable forestry in Tuscany highlights that, in addition to carbon sequestration, it also increases flood resilience (natural flood protection measures), maintains soil quality and supports biodiversity. On the other hand, logging often has negative impacts: soil compaction, disruption of the water regime, loss of stand structure.

Table 1 (above) summarises the main differences in benefits and risks. For example, increased timber production would reduce some ecosystem services according to models – a study for „global climate targets“ shows that pressure for more logging already often conflicts with biodiversity targets and other national forestry policies. If logging were to increase in line with ambitious climate targets, the study finds that it would negative impacts on multiple ecosystem services and biodiversity.

Examples of projects and initiatives in the region

There are not many fully functioning projects selling forest carbon credits in Central Europe yet, but pilots and initiatives are underway:

• Czech Republic: The state-owned enterprise Lesy ČR has announced a pilot project on almost 10,000 ha in South Moravia (Ždánický les), where forestry measures will be implemented to increase CO₂ binding. The collected credits would be offered to companies to offset emissions. The certification process is still awaiting approval of the methodologies, but the project is supported by the ministry (such credits would expand the company's resources). Negotiations on similar plans are also underway in other parts of the Czech Republic.

• Slovakia: The state-owned enterprise LESY SR has not yet announced a large forest carbon project, but forest owners (including private ones) are starting to get informed. For example, the activity of the Slovak Agricultural University and the Ministry of the Environment is exploring the potential of supporting forests as carbon sinks (pilot studies). Individuals and companies can register small afforestation projects or management changes through international standards (e.g. VERRA). There are also consultants such as Zero Emission, who prepare projects according to the VERRA and Gold Standard standards.

• Poland: The government launched in 2017 "Forest Carbon Farm (FCF)" pilot program„ aimed at improving the carbon storage in its forests. The project lasts 10 years (monitoring continues for another 20) and its goal is to improve the carbon inventory of Central European forests and support the measurement of carbon flows. The results should help to better model the potential of Central European forests.

• Austria: The Austrian Forest Agency has issued guidelines for sale of carbon credits from the forest, emphasizing the need for compliance with LULUCF and the overall EU climate policy. In practice, some owners are already discussing the certification of stands, but no large projects have been announced yet. However, Austria has long invested in forest research projects on forest adaptation and afforestation.

• Hungary: Forest experts point out that in Hungary, participation in the voluntary market can be a source of additional income for owners (credit = ton of carbon sequestered). The average price of €30–50/t (2024) is expected to be even higher, but they also emphasize that certification is financially and administratively demanding. Part of the solution here is to preserve existing forests rather than plant new ones, similar to REDD+ pilots, but REDD+ projects in this area are not a subject due to the low deforestation rate.

At a general level, the region still lacks a project directly below the standards of VCS/VERRA or Plan Vivo – such initiatives are more widespread in developing countries. Nevertheless, companies are also investing at home: a successful example is Italy, where parts of the foothill forests are involved in integrated sustainability project, including the sale of "sustainability credits" for forest conservation, water and soil protection. In Central Europe, communities or local governments can follow a similar model.

Forest protection and production of natural carbon credits represent a promising alternative in the medium term: provides income (especially with rising carbon prices), significantly increases the accumulated carbon stock and supports biodiversity and eco-services (protection of soil, water, resilience to damage). However, logging still brings higher immediate incomes to traditional economies and is well established in the economy. However, in the long term, it requires adaptation to climate stresses - it is precisely changing economic models to more sustainable ones that can reduce potential losses from disasters, if a study on the sharply increasing costs due to climate change suggests.

From a legal perspective, the EU is creating the prerequisites and conditions that could make forest carbon credits more competitive in the future (certification, demand stimulation). However, clearer political support (e.g. inclusion in the ETS) and stable financing of such projects are still lacking. Ultimately, it will be important to determine how quickly regulated carbon markets develop and whether companies sufficiently value the multi-layered functions of healthy forest ecosystems. JRi&CO2AI

Sources: Published studies and reports compared economic models and forestry projects in the EU, analyses of voluntary carbon markets inform price trends and certification processes, and specific projects or initiatives in the Czech Republic, Poland, and Italy illustrate how new approaches are being applied in practice.