Land Use Restrictions & Implications During Carbon Leases
- Craig Kaiser
- Apr 27
- 3 min read
A carbon lease is an agreement between a landowner and a company, where the landowner is paid to store carbon on their property through practices like reforestation, soil conservation, reduced tillage, or using a previously drilled oil well. The purpose of a carbon lease is to reduce carbon emissions and combat climate change.
What is Carbon Leasing?
Landowners have the opportunity to engage in carbon leasing by participating in carbon sequestration efforts, either through soil-based storage or by utilizing trees on their property. This process, commonly referred to as carbon offsets or carbon sequestration, allows landowners to contribute to reducing atmospheric carbon. Additionally, landowners can lease previously drilled wells on their property for underground carbon storage, a practice widely known as Carbon Capture and Storage (CCS).
Once a carbon lease is established, landowners must adhere to the restrictions and guidelines set by the carbon developer. These leases are often for fixed terms, such as 10 or 20 years, during which the landowner may face limitations on other uses of the property. Terminating the lease early could result in penalties. As part of the agreement, landowners may need to grant the company access to monitor the property and ensure compliance with the terms of the lease. This could involve regular inspections and measurements, though many carbon developers rely on satellite imagery rather than on-site visits. If you’re interested in learning more about how much money you could make off of your property through carbon credits, just find and identify your parcel on our map to get your free estimate! Whether you choose to try to lease your land for carbon credits from your property after getting your free property report is up to you, but understanding this information is essential.
Land Use Restrictions & Implications During Carbon Leases
During a carbon credit lease, the landowner may have to restrict their land use to activities that promote carbon storage, such as planting trees or using no-till farming practices. These restrictions may limit the landowner's ability to use the property for other purposes, such as development.
Limits on land use: The landowner may have to limit their use of the land to activities that promote carbon storage, such as reforestation, afforestation, or conservation tillage. For example, if the land is currently being used for agriculture, the landowner may have to reduce tillage or adopt cover crops to promote carbon sequestration in the soil.
Restrictions on harvesting timber: If the landowner agrees to plant trees as part of the carbon storage practices, they may have to agree to not harvest the trees for a certain period of time, such as 10 or 20 years. This is to ensure that the carbon stored in the trees remains sequestered.
Limits on development: The landowner may have to agree to limit or prohibit any development on the land during the lease term. This could include restrictions on building new structures or infrastructure, mining, or any other activities that may disturb the soil or vegetation.
Conservation easements: In some cases, the landowner may have to grant a conservation easement, which is a legal agreement that permanently restricts certain uses of the land to protect its conservation values. This could include prohibiting development, restricting agricultural activities, or preserving natural habitats. Although landowners can participate in both conservation easements and carbon credit programs simultaneously, it is uncommon, because these programs differ despite having various similarities.
Access for monitoring: The landowner may have to allow the carbon lease company or a third-party monitoring organization access to the property to monitor and verify the carbon storage practices being implemented. This may include allowing periodic site visits, installing monitoring equipment, or providing regular reports on activities.
It's important for landowners to carefully review and understand the land use restrictions and other obligations that come with a carbon lease before agreeing to participate. Landowners should consider their long-term goals for their property and work with legal and financial advisors to ensure that the lease is aligned with their interests and objectives if they have received a lease offer to sell carbon credits from their land.
