Managed forests are facing a trade-off where maintaining forest carbon stock and maximising harvested timber seem opposite objectives. Adjusting the management of these forests to produce carbon credits comes at a cost of USD 9-46/tCO2e (2025 costs).
The range in costs are mainly driven by the opportunity cost of lost timber revenue — at least 30% of total expenses in most scenarios — with another 25% allocated to boosting forest resilience and biodiversity conservation.
IFM projects in the VCM can issue larger volumes of credits in early years for avoided harvesting (reduction credits, up to 20tCO2e/ha/yr) and smaller volumes in later years for increases in forest carbon stock (removal credits, up to 6tCO2e/ha/yr).
By 2035, we estimate 45-65 Mt/yr of CO2 could be abated at a net cost of up to USD 25/tCO2e. By 2050, 90-240 Mt/yr could be abated at a net cost of up to USD 50/tCO2e.
In 2035, the abatement of 60-75 Mt/yr for less than USD 50/tCO2e would require a total of USD 1.2-1.3 billion. This is less than 1% of the USD 290 billion market projected for the global forestry industry in the same year. This suggests the production of significant carbon credit volumes from managed forests need not come at the expense of a growing timber industry.1
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