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Are ‘Milestone’ Initiatives Set to ‘Unlock the Potential of Hemp’ For UK Economy & Climate?

A growing number of schemes aimed at offering industrial hemp farmers an additional and potentially significant revenue stream through the issuance of carbon credits have begun to emerge over the past year.

Despite the controversy surrounding much of the carbon credits market, the potential opportunities are beginning to turn the heads of many investment-starved UK cannabis businesses.

While the crop’s green credentials have long been touted by the industry, the carbon credit framework, alongside a major new research project, could be the tip of the spear used to break stifling regulations and ‘unlock the potential’ of hemp for both the UK’s economy and climate.

The British Hemp Alliance’s Founder Rebecca Shaman told Business of Cannabis: “Five years ago [hemp] was considered the poor Cinderella of the cannabis industry and no one really talked to us. I would say in the next two or three years, when the data comes together, we’re going to see hemp be considered a really, really important crop for the future.”

Carbon markets 

In a nutshell, the carbon credit market is a system that enables businesses to offset their carbon emissions by investing in projects which help reduce carbon emissions.

There are generally two different types of carbon market: government-regulated compulsory carbon markets and unregulated voluntary carbon markets.

In the UK, ‘energy intensive industries’ fall under the compulsory ‘UK Emissions Trading Scheme’, which replaced the EU ETS in 2021 following Brexit, but works on a similar basis.

Companies are given a ‘cap’, or limit, on emissions they must meet in order to avoid penalties. If a company is under its allocation, it is able to sell its spare allowance to companies that would otherwise exceed their limits. This cap is lowered each year to encourage a reduction of emissions.

Then there are voluntary carbon markets, where companies can choose to participate in order to reduce their carbon footprints, purchasing credits from companies that either remove or avoid emissions to offset their own greenhouse gas emissions.

This market is not regulated by the government, but a number of independent certification bodies will define standards and provide accreditation.

Carbon credits from hemp

Companies looking to sell carbon credits or carbon allowances can do so in a variety of ways, and these are valued differently depending on whether they actively remove carbon and for how long.

Jamie Bartley, founder of the Unyte Group and one of the leading voices in the sector, explained to Business of Cannabis that ‘high quality carbon removal’ credits, those which are valued highest on the market, are projects that have ‘physically removed carbon dioxide from the atmosphere and stored it in some semi-permanent state’.

This is where hemp and its carbon sequestration properties come into play. One of the most established and lucrative routes of generating carbon credits from hemp currently is by turning the biomass into ‘biochar’ via a process called pyrolysis.

For example, if a farmer is growing cannabis to produce hemp seed oil, then the primary product is the seed. The rest of the plant biomass, essentially waste to the farmer, is where all the carbon is sequestered.

If this waste was then turned into biochar, then they could ‘absolutely claim a high quality carbon credit as well as revenue from your hemp seed oil’, provided the farmer has offset their own carbon emissions first.

“Once it has gone into biochar, that biochar won’t break down and release carbon dioxide back into the atmosphere for at least 1,000 years based on the stability of the carbon,” Mr Bartley explained.

Despite this, he went on to stipulate that as the market currently stands, growing hemp for carbon credits is not financially viable as a primary source of income.

“I’ve had a lot of people talking about growing hemp for carbon credits. It just doesn’t stack up just to go for carbon credits… even with those very high value credits.

“I think it works as part of the toolset. As long as you’ve got a primary revenue stream coming in, I think absolutely having carbon credits from pyrolysis is a viable secondary income stream.”

New research project

One of the reasons pyrolysis, which requires expensive machinery, is currently the preferred method of generating carbon credits, is because currently it is ‘the only thing that is tangible’, regardless of whether it is the best use for hemp.

Despite the growing number of carbon credit schemes on the market, there is no defined route to market for hemp farmers at the moment.

Furthermore, according to The British Hemp Alliance’s Nathaniel Loxley, the ‘reputation of the voluntary carbon market has been decimated’ in recent years, seeing the value of carbon credits sold there follow suit.

A key reason for this is the lack of a standardised robust mechanism for measuring the value of carbon credits.

For hemp, this could soon be about to change thanks to a major new research project announced in June. 

The four-year £5.9m research project, which is being supported by a consortium of 22 industry and research partners, including the British Hemp Alliance and Unyte, will focus on the carbon sequestration properties of five rotational crops, including industrial hemp.


Centre for High Carbon Capture Cropping Logo
The research aims to help UK farmers and growers target Net Zero and build farming resilience through diversifying their arable and forage cropping.


Crucially, as Mr Bartley explained, this will focus on carbon sequestration not only in the crop’s biomass but also in the soil, which he described as the ‘missing piece of the jigsaw’.

He continued that there isn’t ‘enough robust research and work being undertaken on the carbon in the soil’, meaning hemp ‘misses an opportunity in deriving value for farmers’ because it’s been so difficult to accurately measure.

Mr Loxley said that this research project will seek to provide farmers with a robust and trusted mechanism to actively go to the voluntary market and derive value.

“It’s a quite exciting commercialisation opportunity for hemp growers. It does offer something that can be standardised and accessible for farmers to be able to get data points and measure that progression.”

Ms Shaman added: “The problem with a lot of these carbon credits is that they’ve been discredited, as there hasn’t been a methodology that is robust enough to actually show that it is effective… because it’s basically a new thing, it’s very, very early days.

“So, the project that we’re involved in will not only have a methodology that can be scrutinised and actually looked at but also then can be scaled up and scaled out. And we could be one of the leading countries doing that.”

Proceeds of crime 

In an effort to ensure the UK is able to take full advantage of the opportunities presented by industrial hemp, there are also efforts underway to amend legislation that has long constrained the industry.

Farmers of industrial hemp continue to be penalised by law enforcement as part of the Proceeds of Crime Act (POCA), regardless of the THC content of the crops they’re growing.

Nicholas Morland, Tenacious Labs CEO and secretariat of the APPG for CBD and Industrial Hemp, told Business of Cannabis: “Without POCA saying there is a limit below which it is legal, nobody can provide services. It’s got nothing to do with the cannabis industry, but everything to do with Barclays, NatWest and Santander.

“It’s very easy to fund as long as the person who wants to invest in it can send their money. At the moment they can’t send their money, because the lawyers can’t take it and the banks can’t take it.”

However, this restrictive legislation may soon be about to change, in large part thanks to the opportunities presented by hemp biochar and carbon credits.

According to Mr Morland, following several discussions with senior members of the UK government, the APPG has the support it needs to amend POCA.

“They just need a sensible proposal. What we’re pushing at the moment is carbon credits.

“So we’ve got a process that allows us to turn around and say ‘we need to change POCA so that below 0.3% at the seed stage we can produce these carbon credits and people can grow without a licence’.

“If we can get carbon credits through far enough for them to give up 20 minutes of time to add a paragraph on the existing proceeds of crime legislation, exactly as we did in Jersey, then we’ve got the ability to cultivate.”

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