Timber construction credits: a new solution for forests, investors and the carbon market

Cost as a barrier

With an additional harvesting potential of 2.8 million cubic metres a year, the Swiss forest could provide around 1.1 million cubic metres of solid timber for construction, according to Fedrizzi, keeping 1.1 million tonnes of CO₂ a year out of the atmosphere in buildings for the long term. At around 15 percent, Switzerland already has a high share of timber construction. Cost remains a key barrier: according to Wüest Partner, 9 out of 10 institutional property developers and investors are not prepared to pay around 10 percent more, especially for Swiss timber.

If no more (Swiss) timber comes out of the forest, no more can be built with it.

A credit for construction and the forest

The Timber Finance Initiative was therefore developing, with an international working group, the world's first tradeable carbon credit for timber construction, while building a pipeline of Swiss projects. The credit was meant to offset much of the extra cost and to compensate forest owners for sustainable management and higher harvesting costs on difficult terrain. The credits were to be sold to companies with net zero commitments. As tailwinds, the article cites the inclusion of “Timber in Construction” by the UNFCCC in July 2022 and the Federal Council's report on CCS and negative emissions of May 2022.

How Timber Carbon sees it

The idea of rewarding both the developer and the forest shaped the later pilot phase, see the Lignum news item. Timber Carbon, launched in 2026 as a spin-off of Timber Finance, quantifies, certifies and monetises the carbon removed in mass timber buildings as carbon removal credits on the voluntary carbon market. The article in Bündner Wald shows how this supports sawlog management.