Farmland prices impact BCT self credit generation

Self-supplying offsets used to look like a neat hedge: buy land, run the BAM, register a stewardship site, generate credits, and lock in supply. With farmland prices higher, it increasingly looks like a balance-sheet-heavy way to solve what is fundamentally a procurement problem. Buying the land does not eliminate opportunity cost—it converts it into capital employed.

Capital allocation: owning a stewardship property ties up expensive rural land under long-dated constraints, often with limited alternate-use upside. For most developers, that capital competes directly with projects that drive earnings. Unless self-supply delivers a clearly superior risk-adjusted cost per credit (after holding costs and governance), it will dilute IRR.

Mismatch risk: the credits you can create are not guaranteed to be the credits you need. Like-for-like constraints and variable credit yield mean you can still end up buying in the market—after you have already paid for the land and the program.

Execution risk: a stewardship site is a decades-long operational obligation (management actions, monitoring, reporting, compliance). If delivery slips, the downside is real: remediation spend, delayed credit availability, and reputational exposure. Rising land values raise the cost of that downside.

Net: in a higher land-value environment, self-development is less a cost-saving tactic and more a leveraged position on future credit prices and site performance. Many proponents will be better served treating credits (or the BCF payment pathway) as risk transfer and focusing scarce capital on the core build—unless they have a genuinely strategic land position and a credible pathway to generate the exact credit types required.