Summary
Woodlands provide a wide range of environmental and societal benefits, including several related to water. Prominent among these are protecting water quality, reducing flood flows, and cooling streams and rivers. Current financial support for woodland creation undervalues the water-related benefits of woodland and falls short of delivering the required scale of land use change to achieve desired outcomes.
Forest Research has led a range of projects to increase knowledge about the water-related benefits of woodlands and to evaluate the costs and benefits of associated investments, including the Payments for Ecosystem Services (Forests for Water) COST Action, commonly referred to as PESFOR-W. This was an international research network that reviewed evidence on the ability of woodland creation to improve the freshwater environment, and on the governance and cost-effectiveness of woodlands for water payments for ecosystem services schemes.
The development of a WWC was a key action under the England Trees Action Plan (ETAP), with significant scope to help deliver a range of Defra policy goals, including several targets within the 25-Year Environment Plan for clean water and managing flood risk. By laying the foundation for monetising woodland water services and attracting greater private sector investment in woodland creation, the WWC could bring about transformative change through increased woodland profitability, driving greater targeted planting by landowners to make a difference for the freshwater environment and communities impacted by flooding.
Funding was secured for a two-year project running from April 2023 to March 2025 to design and develop a WWC following a successful bid to Defra’s Nature for Climate Fund.
Research objectives
This projects objectives were to:
- research, design, develop, beta-test a WWC for one or more water services
- Develop methodologies to quantify each of the three woodland water benefits plus draft associated methods and rules
- Test and trial each of the methodologies at a range of sites across the GB
- Produce country-based priority maps highlighting where woodland water benefits are most needed
- evaluate how the WWC aligns with outputs from the British Standards Institution, the Nature Markets Framework, and compliance markets
- develop a future roadmap for the potential launch of a WWC
- explore the potential barriers and opportunities for landowners (sellers) and buyers of Woodland Water Units
- raise awareness of the WWC among potential end users
Findings and Recommendations
The project successfully delivered the core elements of a WWC, including scientifically robust methods for quantifying each of the woodland water benefits. The water quality and flood methods build on well-established models, and while the cooling method is relatively simple, it is founded on a strong relationship between overhead canopy cover, shade and water temperature. All three methods draw on biophysical metrics that are spatially explicit, enabling their application at the field scale and to a specific location/area of planting.
The three water benefit methodologies are underpinned by a detailed set of methods and rules to ensure they are robust, permanent and additional. While they will continue to evolve through future learning, all main aspects are covered, including eligibility, leakage, environmental guidelines, social responsibility and project governance. A basic assumption is that woodland water benefits will be assured through compliance with the UK Forestry Standard, which has been incorporated as a minimum requirement.
An initial set of target maps has been developed for each water benefit to direct the WWC to where water pressures are greatest and woodland water benefits most needed to make a difference. Maps have been co-developed with country water regulators, with full coverage for England and Scotland but further work needed for the targeting of one or more benefits in Wales and Northern Ireland. Data are lacking to apply the flood benefit to Northern Ireland, while there is significant scope to narrow the target area for the flood benefit across the UK.
All three water benefit metrics have been incorporated into separate Woodland Water Units (WWUs), with scope to stack or bundle these. Market research revealed a strong interest in and support for a WWC amongst potential buyers and sellers. A key finding was the need for policy to drive demand and for regulation to provide long-term market certainty, including the scope for the WWC to be accredited by the UK government. A common response was that the WWC would benefit from being an add-on to the Woodland Carbon Code, both to build upon its reputation and to minimise the administrative burden and costs associated with generating WWUs. A common criticism was that the WWC appeared overly complex, although it was recognised that detailed methodologies were required to ensure WWUs were high-integrity and that projects avoided unintended negative consequences.
Latest Update
Successful delivery of a draft WWC led to securing additional funding to continue its development. Work on ‘Phase 2’, ‘Validating Woodland Water Code metrics and methodologies’ began in April 2025 and ran until the end of March 2026.
To find out more about the WWC, please contact tom.nisbet@forestresearch.gov.uk.
Downloads
Further information
Frequently asked questions (FAQs)
When will the WWC be available to use?
There is currently no confirmed timeline for the WWC to go live as an operational code. However, certain elements of the Code such as the water benefit calculators may be released in advance. The final implementation of the WWC will be guided by future policy development on green finance and water regulation.
Will the WWC be UK-wide?
The aim is to develop a UK-wide WWC. Representatives from all four devolved nations were on the project Steering Group, and discussions are expected to continue to ensure the WWC remains applicable across the UK.
What is a Woodland Water Unit?
Woodland Water Units would represent a new type of credit. They would be used to represent the quantified benefits provided by the created woodland for the three water elements included in the WWC (water quality, flood alleviation and water shading). The benefits are quantified using bespoke tools, optimised for use by the WWC. Woodland Water Units are complex compared to carbon credits which use a common metric (greenhouse gas equivalent).
How will good woodland management practices be enforced?
The WWC will require woodland management practices to follow the United Kingdom Forestry Standard (UKFS) regarding all aspects such as woodland design, establishment and water protection. The Woodland Creation Sensitivity Map, ground truthing, Environment Impact Assessments (EIA) and other requirements will be followed before woodland is approved and Woodland Water Units are generated to ensure existing priority habitats and species are not adversely affected.
Who are the buyers of Woodland Water Units?
Market research identified a range of potential buyers of Woodland Water Units through the WWC. Buyers would include any company or organisation looking to invest in woodland creation with an interest in delivering water benefits. Initial market research indicated a particular interest from companies/ organisations:
- with a direct reliance on a supply of clean water (e.g. food and drinks industry and water companies);
- impacted by flooding (e.g. insurance and reinsurance companies, local authorities and local communities); and/or
- involved in river restoration (e.g. Wildlife/ Rivers Trusts and Fishery Groups).
How are water resources considered?
It is recognised that woodland creation could present a potential disbenefit for water resources, depending on a wide range of factors. Consequently, water resources are not part of the WWC, but instead considered under the regulatory process for woodland creation projects. Vulnerable areas have been identified and will be excluded if woodland creation is assessed as likely to further exacerbate the issue.
has developed a Volumetric Water Benefit Accounting method for implementing and valuing water stewardship activities. Whilst this method does include reforestation, it does not provide a standardised methodology for quantifying the impact of woodlands on water resources, or a private finance mechanism tailored to woodland creation in the UK – which is the focus of the WWC project.
Will the WWC be applicable for both voluntary and regulatory/compliance markets?
The WWC is expected to be a voluntary Code at the outset, aligning with the WCC. However, the methodologies underpinning the WWC could be utilised in other markets. For example, the WWC team worked with Natural England to ensure the approach was consistent with Nutrient Trading in England.
The project team also liaised with contacts in the Welsh Government and Natural Resources Wales to ensure consistency with developments in Wales on nutrient neutrality. It is recognised that some water companies are already working with farmers to undertake nature-based solutions to tackle water quality issues – some involving tree planting (e.g. see case studies).
In these instances, the WWC may not be required as a vehicle for financing woodland creation schemes but could provide a consistent methodology for assessing the water benefits for reporting purposes. For organisations outside the water sector with an interest in investing in woodlands for water, the WWC would provide both a methodology and investment opportunity.
Why is only woodland creation included, and not other habitat types?
All four UK nations have set stretching targets for woodland creation to deliver multiple benefits, including for water. The aim of the Woodland Water Code (WWC) is to facilitate the quantification of the water benefits provided by woodland creation projects to increase private investment and further incentivise land use change. It is estimated that the gap in finance to meet the UK’s woodland creation goals between 2022 – 2032 is at least £1,800 million.[1]
There is an abundance of research that has evidenced the benefits of woodland for water, examples of which can be found in a Woodland for Water (2011) report, the Payments for Ecosystem Services (Forests for Water) PESFOR-W (2016-2021) COST Action and IUFRO: Forests and Water on a Changing Planet. In addition to water, woodlands provide benefits such as carbon sequestration, biodiversity and improvements to health and wellbeing.
While our focus is on woodland, it is recognised that other habitat types, such as wetlands, also deliver water benefits. These are outside the project scope, however, the WWC team are interested in collaborations to explore whether the WWC could fit within a wider code, such as an overarching water code or land use change code. The team continues to work closely with the Woodland Carbon Code (WCC), which remains the favoured option for integrating the WWC. A wider code, whilst valuable, is expected to take much longer to develop.
The inclusion of agroforestry and other tree/ vegetation planting also remains outside the scope of the WWC, as this would complicate the quantification of water benefits (e.g. developing or modifying existing hydrological models) and the rules for key issues such as leakage and permanence. This aspect will be kept under review and considered for future refinements of the WWC.
Will natural regeneration be eligible under the WWC?
Yes, natural regeneration as well as tree planting will be eligible under the WWC.
Woodland creation can involve pesticide usage, including herbicides. How is this included in the water quality metric?
The Farmscoper model (version 5, 2021) developed by ADAS is used to calculate pollutant loads from the field/farm to the watercourse on an annual basis. Farmscoper estimates pesticide losses in dose units, which incorporates herbicides, fungicides, insecticides, molluscicides and growth regulators.
The number of sprayer applications used to apply some of these chemicals is also included. Pesticide values for arable land in Farmscoper’s calculations are obtained from the Pesticide Usage Survey Report of Great Britian 2005-2006 and averaged across a farm rotation. For woodland, pesticide values are not included. Unlike arable land, the use of pesticides in woodland is relatively uncommon and where needed, is usually limited to a few years after planting to achieve tree establishment, such as by controlling weeds or pests. Woodland is considered to have a rotation of 100 years, which is much longer than that of arable land (3-5 years). The combination of the very infrequent use of pesticides over this period and the spot treatment nature of applications means that losses to water are very small/negligible, especially when averaged annually. This is evidenced by targeted studies often failing to detect the presence of pesticides in waters draining woodland.
As for all woodland creation projects, United Kingdom Forestry Standard (UKFS) requirements and guidelines will apply and should be checked as part of associated grant awards or for UK Woodland Assurance Standard (UKWAS) accreditation. [3],[4],[5]
——
[1] Green Finance Institute, The Finance Gap for UK Nature, October 2021, p.53
[2] G. Sellers, Forest Research (2014), Weed Control BPG Note 11: Best Practice Guidance for Land Generation, 2014.
[3] Forestry Commission (2019), Managing forest operations to protect the water environment, Forestry Commission Practice Guide.
[4] Forestry Commission (2004), Reducing Pesticide Use in Forestry, Forestry Commission Practice Guide.
