A group of companies and organisations with ties to the forestry sector have teamed up to lay the foundations for a Swedish market for voluntary biodiversity credits.
World Forest Forum, forestry corporations Soedra and Norra Skog, and Qarlbo Natural Asset Company have formed the Swedish Biocredit Alliance, which hopes to kickstart a biodiversity credit market in the Scandinavian nation over the next two-year period.
“There are good conditions in Sweden and the Nordic region for a credible and transparent market for trade in biodiversity credits. However, the basic structural foundations for a market are missing,” the alliance told a webinar Thursday.
“We have initiated the Swedish Biocredit Alliance with the aim to create [a structural framework] for verifiable transactions for nature protection projects.”
Initiative to form the alliance was taken last year based on the development of a boreal forest biodiversity crediting methodology developed by Aleksandra Holmlund, a PhD student at the Swedish University of Agricultural Sciences (SLU), although the group was not formalised until earlier this year.
Holmlund is also the CEO of Qarlbo Natural Asset Company, a subsidiary of family-owned investment firm Qarlbo AB.
In a pilot deal last May, the first of its kind in Europe, Swedbank bought 19 credits developed by Orsa Besparingsskog, a forest co-op, based on Holmlund’s methodology.
The methodology is now being peer reviewed, though the alliance has formulated some of the foundations on which a local market will be built, including principles on additionality, transparency, and measurability.
Credits issued for the market cannot be used for offsetting purposes, but must be sought by buyers wishing to make additional contributions to biological diversity.
Martin Pilstjaerna, one of the alliance’s co-founders, told the webinar that work is ongoing to finalise rules and guidelines for projects, validation and verification, and trade.
Working groups are planned on buyer needs, data collection and quantification, and trading rules, including claims, with input being sought from potential buyers.
The groups behind the alliance are largely potential sellers of credits, though Pilstjaerna and his colleagues stressed at the webinar that a lot of resources in the coming months would go towards engaging a potential demand side.
That will include a second webinar in mid-April, when the alliance will invite potential buyers exclusively to discuss concerns or questions they might have.
In late May, the Swedish Biocredit Alliance will arrange an event at which a batch of new projects that have been developed under its guidelines will be presented, and in September there will be a sales event for credits from those.
While there are no immediate plans to expand this market to regions beyond Sweden, or to other nature types than boreal forests, the group said such an expansion might happen in the future.
However, for the time being, the parties consider the alliance as an initiative limited in time to two years aimed at driving a forestry-based market in Sweden.
By Stian Reklev – stian@carbon-pulse.com
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