How financially beneficial is it to create a new woodland in Scotland and what grants etc are available

28th June 2025

Creating new woodland in Scotland can be financially beneficial—both through direct grants and long-term income streams—while also delivering environmental and social value. Here's a breakdown of the key financial aspects and support available.

Financial Benefits of Woodland Creation
Grants & Subsidies: The Scottish Government offers substantial support through the Forestry Grant Scheme (FGS). This includes:

Initial planting payments (typically around £2,500 per hectare)

Annual maintenance payments for up to 5 years

Capital grants for fencing, tree protection, and infrastructure

Timber Revenue: Depending on species and rotation, commercial woodlands can generate income from timber sales after 20-40 years.

Carbon Credits: Woodland creation can qualify for carbon offset schemes, allowing landowners to sell carbon credits on voluntary markets.

Land Value & Diversification: Woodland can enhance land value, support biodiversity, and diversify farm income—especially when integrated with agroforestry or eco-tourism.

Grants & Support Available
Forestry Grant Scheme (FGS)
Purpose: Supports both new woodland creation and sustainable management of existing forests.

Options: Nine woodland creation models tailored to land type and objectives (e.g. native broadleaf, productive conifer).

Payments:

Initial planting: ~£2,500/ha

Annual maintenance: Paid over 5 years or as two capital instalments

Capital items: Fencing, gates, shelters, etc.

Small Woodland Loan Scheme
Advance funding for the first 20 hectares of planting to help with upfront costs

Basic Payment Scheme (BPS)
Land converted to woodland under FGS may still be eligible for BPS, provided it meets certain criteria

Things to Consider
Land Suitability: Not all land is eligible—environmental impact assessments may be required.

Long-Term Commitment: Woodland creation is a multi-decade investment; returns from timber or carbon credits take time.

Planning Support: Scottish Forestry provides guidance and can connect you with forestry agents to help design and apply for grants

What is the application process for these grants?

Applying for woodland creation grants in Scotland involves a structured process, but it's very doable—especially with the right prep. Here's a step-by-step guide to help you navigate the main schemes:

1. Forestry Grant Scheme (FGS)
Eligibility
You must own or lease the land (tenants need landlord consent).

The land must meet woodland creation suitability criteria.

You must be registered with Rural Payments and Services.

Application Steps
Register with Rural Payments and Services (if not already).

Prepare a Woodland Creation Operational Plan, including maps, species mix, and objectives.

Submit your application online via the Rural Payments portal.

Consultation & Assessment: Scottish Forestry will assess your proposal, including environmental impact and alignment with national priorities.

Approval & Contract: If successful, you'll receive a contract outlining grant amounts and conditions.

Do not begin work until your contract is approved.

Timing
Applications are accepted year-round, but funding is competitive and subject to budget availability.

2. Small Woodland Loan Scheme (SWLS)
This is a loan, not a grant, but it helps with upfront costs for small-scale planting (up to 50 ha).

How to Apply
When applying for FGS, opt in to the loan scheme in your Woodland Creation Operational Plan.

If approved, you'll receive 50% of the capital grant value in advance, up to £40,000.

3. Basic Payment Scheme (BPS)
If your woodland is on eligible agricultural land, you may still qualify for BPS payments.

Application Process
Submit a Single Application Form (SAF) annually via Rural Payments.

You must demonstrate active farming and meet cross-compliance and greening requirements

Scotland
For information on how to go about it all go to
Scottish Forestry

UK - England
The UK government has just published some guidelines for woods over 100 Hectares but there may be some useful guidelines for land owners in Scotland.
Read it HERE