Category: Carbon market insurance · Reviewed by Taylor Watts, Broker · New Business · Last reviewed 2026-06-10
Reforestation insurance is a class of specialist cover that protects afforestation, reforestation and revegetation (ARR) projects, and the carbon credits they issue, against the principal perils that interrupt growth or cause reversal — fire, pest, disease, drought, windthrow, illegal logging and change of land use.
Category: Carbon market insurance Also known as: Afforestation insurance, Forestry carbon insurance, Tree planting insurance Typical UK market form: Forestry property and specie / financial lines hybrid Related concepts: Sequestration insurance, Carbon credit insurance, Blue carbon insurance
Reforestation insurance is the cover that responds to losses arising from afforestation, reforestation and revegetation projects, structured around two distinct exposure pools: the physical project itself (planted trees, infrastructure, growing stock) and the carbon credits issued by the project under a recognised methodology. The product is generally written as a hybrid of traditional forestry insurance, more recently adapted for carbon revenue and permanence considerations, and specie-style invalidation cover for the credits.
In the United Kingdom the product is most often placed in support of projects registered under the Woodland Carbon Code, although international projects registered under voluntary standards are also routinely insured from the London market.
The principal voluntary standards under which reforestation credits are issued are Verra (Verified Carbon Standard v4.7, ARR methodologies including VM0047), Gold Standard for the Global Goals (v1.2), the American Carbon Registry, the Climate Action Reserve and Plan Vivo. In the United Kingdom the Woodland Carbon Code, managed by Scottish Forestry on behalf of the four UK administrations and established in 2011, issues Woodland Carbon Units (WCUs) and Pending Issuance Units (PIUs) listed on the UK Land Carbon Registry.
The Integrity Council for the Voluntary Carbon Market published its Core Carbon Principles, Assessment Framework and Assessment Procedure on 29 March 2023, and ARR methodologies are now being assessed against the CCP framework. The Voluntary Carbon Markets Integrity Initiative Claims Code of Practice (28 June 2023; v2 November 2024) governs buyer claims and increasingly distinguishes durable removals from short-tenure avoidance.
Reforestation insurance typically combines two coverage strands. The physical strand responds to fire, windthrow, pest and disease (including UK-relevant perils such as Dothistroma needle blight, Phytophthora and ash dieback), drought and frost, illegal logging and change of land use. The credit strand responds to reversal — the loss of sequestered carbon following a physical event — and to invalidation by the registry administrator following methodology revision or sanction.
Specialist underwriters writing in this space include Kita Earth (Lloyd’s Lab Cohort 7, March 2022), CFC Underwriting (carbon credit invalidation product launched April 2023), Howden’s dedicated carbon insurance practice and Oka (founded 2023, Beazley Smart Tracker), in addition to traditional forestry insurers writing in Lloyd’s and the company market. Programmes are commonly structured with the developer’s contribution to the registry buffer pool insured on a treaty or facultative basis, and excess layers placed for catastrophic loss.
Cover periods are aligned with the methodology’s verification cycle and permanence period. Under the Woodland Carbon Code permanence obligations extend for the lifetime of the project, and Pending Issuance Units only become tradable Woodland Carbon Units once growth has been independently verified.
The UK Emissions Trading Scheme, established by the Greenhouse Gas Emissions Trading Scheme Order 2020 (SI 2020/1265), does not currently accept domestic forestry units for compliance, but consultations from the UK ETS Authority (comprising DESNZ, the Scottish Government, the Welsh Government and DAERA) have considered integration.
UK forestry is principally regulated under devolved frameworks: the Forestry Act 1967 provides the statutory basis for the Forestry Commission’s licensing powers in England; the Forestry Act 2018 (Scotland) reformulated devolved Scottish forestry administration; and Natural Resources Wales and the Northern Ireland Forest Service operate equivalent frameworks. Planting must comply with the UK Forestry Standard.
Communication of carbon outcomes is policed by the Competition and Markets Authority Green Claims Code (20 September 2021), enforced by the Advertising Standards Authority. ASA precedent on misleading carbon claims includes the rulings against Lufthansa (December 2023) and Etihad (October 2022).
Per-risk capacity for reforestation projects in the London market is typically in the low to mid tens of millions of pounds per project, with co-insurance and reinsurance placements common for larger or multi-jurisdictional schemes. Capacity has tightened following large forest fire losses in southern Europe, North America and Australia from 2017 onwards, although capacity has progressively expanded with the development of dedicated carbon underwriting practices.
A UK landowner establishes a 1,200-hectare native woodland scheme registered under the Woodland Carbon Code and contracts forward sale of the resulting Pending Issuance Units to a corporate buyer. Its broker places reforestation insurance combining traditional forestry property cover with a credit-side wrap responding to fire, pest, disease and registry invalidation, with the policy structured to fund replacement planting and the procurement of replacement credits where reversal events occur within the verification cycle.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-10. Next review: 2026-12-10.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
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