Far Ralia is located in the Cairngorms National Park, Newtonmore, Highlands, Scotland
The total size of open moorland is 1,471 hectares. Woodland creation through a combination of native tree afforestation and natural regeneration will spread across 750 hectares and the restored peatland will cover 200 hectares.
Anticipated emission reductions: 150,000 tonnes of carbon up to 2060 and over 370,000 tonnes in total over the project life
Improvement of local biodiversity, currently measured by the Natural History Museum’s Biodiversity Intactness Index.
Over the life of the project, aPIT will monitor and report biodiversity net gains and promote a range of co-benefits such as improved water purification, improved air quality, flood mitigation, and social benefits via initiatives to engage local communities.
What is the project doing for Nature and Environment?
The intention is to undertake a mix of native woodland restoration; planting approximately 1.2m native trees and allowing space for no-intervention natural regeneration, with peatland restoration and other forms of biodiversity gain.
The deer population will be managed and missing species, such as wildcats, will be reintroduced.
The project will follow abrdn’s seven principles for nature-based investment: i. Keep it local ii. Keep it balanced iii. Keep it measured iv. Keep it additional v. Keep it people-focused vi. Keep it transparent vii. Keep it holistic
How are communities engaged and benefiting?
abrdn's Comprehensive Social Engagement Code will be followed throughout the programme. Engagement with the Badenoch community is ongoing and key to the success of the project.
The existing bothy is in the process of being restored and opened to the public. Access will be improved through paths.
Between 50 and 100 people will be employed in restoration works over the next six years. We will be using local skills and labour throughout the project, where possible.
Agreement with local beekeeper who will be able to keep bees on the land at no price and of course, the honey. A local deer stalker will also be employed to manage the deer population, at the absence of natural predators.
We are also looking to engage with local schools and universities to host visits and offer volunteering opportunities
What is the business model employed to fund the project?
Private investment by aPIT, alongside government grants.
aPIT, owns 100% freehold of the land. abrdn are the project developers working on behalf of PIT, and in partnership with Akre.
aPIT has a strong sustainability strategy focused people, planet and transparency. Within ‘Planet’, aPIT focused on climate change with a 2050 net-zero target alongside opitmising for nature and biodiversity where possible.
Whist all effort is being made to decarbonise within aPIT’s business activites, some carbon offsetting will be needed. Through this project, aPIT can secure a fixed carbon offset price to contribute to aPIT’s sustainability strategy, while ensuring that the offsetting is of the highest standard and has a sustained positive impact on nature and the climate.
The estimated cost of carbon credits generated at Far Ralia is £22 per tonne on a discounted cash flow basis. With offsets on the Voluntary Carbon Market expected to cost $30-100 per tonne by 2030, Far Ralia de-risks decarbonisation for aPIT and should offer cost savings over the long term.
Excess validated carbon credits to be sold through the Voluntary Carbon Market.
Describe the partnerships formed and how they support project viability?
abrdn, Akre, EY and the Natural History Museum (NHM) are collaborating on this project.
Akre is the strategic partner in the delivery of this project and are contracted to develop and manage the site.
In partnership with the Natural History Museum (NHM) and EY we undertook a Biodiversity baseline survey using the Museum’s proprietary tool, the Biodiversity Intactness Index (BII)
The land at Far Ralia scored below average on biodiversity quality through the BII, revealing that historic use of the site has deeply hurt the local ecosystem.
Based on the plans for the site, the regeneration programme will improve biodiversity by 21% by 2050, returning to the level of a resilient and functioning forest-peatland ecosystem.
What are the main challenges and risks to the project and how are they managed?
Technical - This is an incipient sector and there is an undersupply of knowledge, skill, and experience across the spectrum of consultants and contractors.
To manage this, we have formed relationships with key suppliers early in the process and keep ensuring they are enumerated quickly and fairly. Securing internal resource to anchor the skill set is also part of our risk management process.
Financial - Misunderstanding the carbon budget of the peatland may lead to inaccurate expectations of carbon credits and revenue from the sale of excess credits.
To avoid such miscalculations, we have partnered with experts to help us with the estimation of potential carbon sequestration and who will be reviewing the models regularly.
Political - Debate on whether funds, and the asset management sector in general, should be involved in nature restoration is healthy and ensures that both companies and projects are kept to a high standard. More recently, a hot topic is whether it is government subsidisation that allows such afforestation projects.
In abrdn and within aPIT, we are committed to responsible investment, putting environmental and social considerations, as well as good governance at the heart of decision-making.
To ensure we are on the right path, we are working with local partners, like the Cairngorms National Park, Scottish Forestry, RSPB, local ecologists, forestry partners and the local community to maximise environmental and social co-benefits, alongside climate impact. It is important to recognise the benefits of this regeneration programme and how it fits in the wider agenda to help nature recover.
Environmental - while rewetting peatland is desired and much needed, it is also altering the existing ecosystem, which comes with risks. It may adversely affect ground-nesting birds and other species. Proper due diligence and good monitoring during the regeneration programme will aim to avoid negative impacts to the existing habitat.
Additionally, rewetting can sometimes affect access to the site, but this is not an issue for this site, and Scotland in general, as land is less encumbered. Another environmental risk in joint afforestation and peatland restoration projects is the hindering of proper peatland regeneration due to tree proximity.
Following good peatland restoration practice, afforestation will happen in peat no deeper that 50cm and a buffer of 30 meters, or more, will be maintained between afforestation areas and deeper peat.
Key Learning and Insights
Technical - Through working with local forestry partner Akre, we have already gotten a lot of insight into the native tree and shrub taxa, the collection of seeds from the site and how the seedlings are grown in their carbon-neutral tree nursery in Fife.
The manager at abrdn responsible for the project is a former palaeoecologist and therefore brings his own expertise. Our work with the Natural History Museum, has allowed us to understand how to improve biodiversity and create an ecosystem as close as possible to what would naturally be supported by the local soils and climate.
Financial - As part of the acquisition process, detailed due diligence was undertaken which will play a key factor in keeping future costs low, as we know what we are dealing with and have made projections about the rollout of the programme.
Regularly reviewing carbon sequestration models, based on updated environmental and climatic data will enable accurate estimation of expected financial returns in the form of validated carbon credits and will allow the Fund to manage its budget in a timely manner.
Political - Working at Far Ralia for the past couple of years and with the aPIT team’s extensive experience in good governance, we have learnt that it is most important to have a solid plan, created in collaboration with experts and all stakeholders targeting the achievement of the milestones set, irrespective of the political environment.
We believe that the industry should decarbonise, whether this is mandatory or not and avoiding further carbon emissions by restoring degraded and emitting peatland can play a vital role in this effort.
Environmental - Working with the Natural History Museum, we have developed the optimal break-down of the total area to allow nature to recover freely in unplanted land, along with the planting of about 1.5 million trees, which will be grown from seeds collected from the site on the first phase of the programme. The plan incorporates 11 native tree and shrub taxa, with a focus on native broadleaf and Scots Pine.
