Unlocking global opportunities – carbon credits

The carbon credit system is a cornerstone of global climate policy - supporting the move to net zero by providing incentives for cleaner energy generation/distribution, transportation and manufacturing; and lower carbon emissions. The system encourages businesses to reduce their impact on climate change by allowing them to trade credits (including when they exceed their own emissions targets).

Legislation recently passed in the US (the One Big Beautiful Bill Act) speeds up the expiry of some carbon credits, with various dates proposed for termination or phaseout.

This policy shift in the US may result in businesses (including in the renewable energy sector) that generate carbon credits considering where they operate, and these changes may impact on developers and investors. This uncertainty may affect the decisions of some multi-national companies about where is best to start future projects and provide opportunities for businesses operating (or looking to relocate) in the UK and the EU.

In Scotland and the UK generally, the natural carbon market has been growing for a number of years. For example, Scottish Forestry – in collaboration with the International Union for the Conservation of Nature (IUCN) – has published a set of voluntary template agreements which facilitate the buying and selling of Pending Insurance Units and Carbon Units.

Womble Bond Dickinson has long been at the forefront of sustainable financing - both as a firm, and the clients that we work with. In 2023, we advised Triodos Bank on financing, real estate, and energy issues for two term loan facilities provided to Oxygen Conservation for the acquisition of properties from Buccleuch Estates for a rewilding project. The landmark multi-million pound loan facility (worth £20.55 million) is believed to be the largest conservation-focused commercial debt package in the UK at that time and it allowed Oxygen Conservation to take a significant step forward in its commitment to scaling conservation across the UK by expanding its growing portfolio.

Oxygen Conservation and many other similar companies in the UK aim to tackle climate change and the biodiversity crisis through the delivery of a diverse range of projects, including carbon sequestration through woodland and peatland restoration.

As the move to net zero accelerates, we're committed to supporting projects that deliver positive environmental and social impact, by helping to remove the legal barriers to investment in a sustainable future. As sustainability becomes a key element of business planning and long-term strategy, financial institutions play a crucial role in this transformation.

We advise businesses working to meet their sustainability goals and financial institutions looking to support them. Combining decades of finance, regulatory, real estate and energy experience, our team offers our clients the comprehensive knowledge they need.

For more information about the work we have been doing, and contact details for our team, click here.

If you're looking to support decarbonisation in Scotland, England & Wales or UK cross-border, whether through your own projects or as a funder, and would like to hear more about Womble Bond Dickinson can help you, please get in touch for a confidential discussion.

This article is for general information only and reflects the position at the date of publication. It does not constitute legal advice.