Portugal Expands Carbon Credit Eligibility for Active Forest Management

Portugal's decision to expand eligible forest management practices on its carbon market marks a significant shift in how the country balances climate objectives with forestry economics. By opening carbon credit pathways for thinning and planned felling—in addition to the previously approved afforestation method—regulators are effectively signaling that active forest management can qualify as carbon-positive activity worthy of market compensation.

The expansion addresses a structural challenge in European carbon markets: getting private forest owners to participate. Many Portuguese forest operators face economic pressure, particularly following devastating wildfires in recent years. Allowing thinning and harvesting to generate credits could provide financial incentives for active management, potentially improving forest health and resilience. Thinning operations, in particular, can reduce fuel loads and create more fire-resistant landscapes—aligning economic and environmental goals.

However, the move raises critical questions about additionality and real carbon impact. Planned felling operations that would occur regardless of carbon credit incentives risk becoming unearned windfall credits. Regulators will need robust monitoring to ensure these practices are genuinely marginal—undertaken specifically because of carbon market incentives—rather than business-as-usual activities simply rebranded for credit generation. The methodology design becomes crucial: verification standards must credibly demonstrate that carbon sequestration benefits offset emissions from harvesting and transport. Without rigorous guardrails, expanded eligibility could undermine market integrity while appearing to expand participation.