Colliers undertakes its first major climate protection project for German forest
By Sara Seddon Kilbinger, Senior Reporter, REFIRE
Interest in forests growing since government raised renewables target
Colliers is undertaking its first climate protection project for the reforestation of more than 400 hectares of forest in Germany.
It will be financed by Cara Investment GmbH, a private property portfolio holder, and project developer Groß & Partner. The damaged forest areas will be reforested with climate-smart trees designed to provide additional CO2 storage capacity over a period of 30 years.
One of Germany's largest forestry companies, the Center-Forst Group, which manages over 25,000 hectares of forest in North Rhine-Westphalia and Hesse, is providing around 430 hectares of clear-cut areas in the Rothaargebirge mountains, which have been damaged by bark beetles, drought and windthrow. In recent years, more than 500,000 hectares of forest have been lost as a result of climate change in Germany alone.
‘We are very pleased that with our innovative project we are helping to reforest some of the forest areas destroyed by climate change, so that the forest can once again perform its ecologically, economically, and socially valuable functions,’ said Nils von Schmidt, co-head Land & Forest at Colliers. ‘An active approach is needed to adapt the forest to climate change. Our project is the first of its kind, but certainly not our last.’ Eckbrecht von Grone, co-head Land & Forst at Colliers, adds: ‘On average, the first 230 hectares will store about 40,000 tons of CO2 over the 30-year term. That's equivalent to the CO2 emissions of about 200 million kilometers driven in a passenger car.’
For Jürgen Groß, managing partner at Groß & Partner, the link between reforestation and real estate projects is clear: ‘I can well imagine that reforestation projects like this one can be directly linked to specific real estate projects in order to compensate for the share of unavoidable CO2 emissions during construction,’ he said. ‘Since we operate in Germany, we were also keen to support a local climate protection project. Here we can see the project progress for ourselves.’
Interest in forests growing since government raised renewables target
Such projects are likely to become more popular. In a recent interview with WirtschaftsWoche, Max Freiherr von Elverfeldt, the federal chairman of the Verband Familienbetriebe Land und Forst, noted that interest in woodland and in land suitable for wind turbines is ‘growing enormously’, particularly since politicians raised their targets for land use for renewable energies. Land und Forst represents the interests of around 2,000 private farms, many of which are owned by long-established noble families.
The share of renewables in net electricity generation in Germany accounted for nearly half of total power generation in 2022 at 49.6%, according to the Fraunhofer Institute for Solar Energy Systems (ISE). Both higher sunshine intensity and wind speeds were behind the trend, utility industry association BDEW and the Centre for Solar Energy and Hydrogen Research (ZSW) said in a statement. In 2021, renewables accounted for 42%.
The German government’s ‘Easter Package’, which it introduced in spring last year, is its most ambitious piece of climate legislation so far. The reform package is designed to greatly accelerate the buildout of renewable power sources and other measures to reach a share of 80% in the power mix by 2030 by tripling expansion ‘onshore, offshore and on the roofs’.
German forests, particularly those which have suffered from drought, are being given a new lease of life with the expansion of wind and solar farms, due to the Wind on Land Act, which came into force in February, in a bid to help Germany tackle its deepening energy crisis.
As part of the plan, 2% of Germany’s land area is to be reserved for wind turbines alone by 2032. So far, however, this figure is below 1% because the expansion of wind projects has stalled. Under the terms of the act, the protection of forest species will be weakened to push projects through more quickly, something that has understandably been criticized by environmentalists. The law will also enable distance rules between residential areas and wind turbines to be overruled in some cases. However, in federal states with strict distance rules, such as Bavaria, new wind turbines will typically only be located in remote forest areas, including forests owned by the Thurn und Taxis family. One third or 11.4 million hectares of the national area of Germany is forested, according to the Ministry of Food and Agriculture and around half of German forests are privately owned.
Ambitious targets for solar and wind expansion
The new act is a natural response to the country’s deepening energy crisis. Last autumn,
Chancellor Olaf Scholz ordered the country's three remaining nuclear power stations to keep operating until mid-April, as the energy crisis sparked by Russia's invasion of Ukraine continues to hamper the economy. Originally, Germany had intended to phase out all three stations by the end of 2022. Nuclear power provides 6% of Germany's electricity but gas prices have rocketed since Russia's invasion of Ukraine. Solar expansion targets in Germany are equally ambitious as the ones for wind; by 2026, capacity is due to hit 22 gigawatts. Solar farms require more land than wind farms because they can only go wider, not taller, to increase output, which means more solar power also means more lucrative deals for landowners. Bavaria is leading the charge, with more private plots of land fitted with solar panels than anywhere else in the county. ‘Bavaria is sunshine country, and we are living up to that name,’ said Energy Minister Hubert Aiwanger.
However, landowners have a number of hurdles to overcome. Authorities don’t grant permission for all projects, neighbours can complain and, in other instances, the development costs are just too high. Wind power projects are regulated by the Federal Immission Control Act, which controls noise requirements and species protection, such as for birds and bats. In addition, there are regulations to protect air traffic and military facilities, such as radar installations. Construction planning and the designation of suitable areas by local authorities is also a protracted process: ‘It is not unusual for eight years to pass from the initial planning to the construction of wind turbines,’ said Marie-Luise Pörtner, managing director of renewal energy group BayWa r.e. Wind.