Why Canada Must Align Sequestered Carbon Accounting With Global Markets

When the small British Columbia, Canada, town of Lytton burned to the ground in 2021, it became a stark reminder of climate change and the risks facing communities built with conventional methods. The town experienced such an extreme of heat a day earlier that it broke records by 5° Celsius (9° Fahrenheit) — an extraordinary amount. The (tragically slow) rebuild has become more than a recovery project. It is also a pilot for how Canada might design, build, and account for the carbon in our buildings.

In particular it has highlighted the role of mass timber and the carbon it sequesters. Architects and engineers involved in the rebuild are using models that include the carbon stored in wood products as part of the building’s climate profile. That raises the larger question of how Canada should recognize stored carbon in its building codes and how those rules will align with export markets that Canadian producers want to sell into.

This is one of the last articles in my series examining the role of mass timber in Canada’s housing and climate future. The first piece laid out Canada’s timber moment, framing cross-laminated timber (CLT) and modular construction as the fastest lever for addressing housing shortages, jobs, and embodied carbon. The second explored how Mark Carney’s housing initiative could industrialize the sector through pre-approved designs, offtake contracts, and regional factories. The third explored the requirement for vertical integration within the industry to maximize efficiencies. The fourth showed how CLT displacement could bend the demand curves for cement and steel, making their decarbonization pathways more realistic. The fifth demonstrated that from harvest to housing, CLT already locks away more carbon than it emits, strengthening its climate case.

The sixth turned to the forestry supply chain, arguing that electrification of harvesting, transport, and processing is essential to maintaining CLT’s carbon advantage. The seventh piece addressed systemic barriers, focusing on high insurance costs and bespoke code approvals, and argued that normalizing mass timber in regulatory and financial frameworks is the key to scaling. The eighth piece, arguably one that should have been much earlier in the series, explored the various technologies in mass timber and its currently dominant form, CLT. The ninth piece assessed the global leaders, opportunities and competition for Canada’s mass timber industry and considers lessons to learn. The tenth piece deals with input regarding labor and financing I received over the course of the series from professionals engaged in the space. The eleventh piece focused more on a speed and labor opportunities that mass timber construction has demonstrated. Now the focus turns to carbon accounting.

Carbon stored in wood is straightforward at a scientific level. Trees take in carbon dioxide as they grow, and about half of the dry mass of wood is carbon. When that wood is turned into beams, panels, or other building products, the carbon remains locked away for as long as the building stands. If a cubic meter of cross-laminated timber is produced, it contains roughly one ton of CO₂ equivalent pulled out of the air. A mass timber building can therefore act as a carbon bank, delaying the release of that gas back into the atmosphere. The permanence of that storage depends on what happens at the end of life. If panels are reused or landfilled under conditions that prevent decay, the carbon can remain out of circulation for centuries. If the wood is burned or allowed to rot, the carbon is released. That is why policy makers have been careful about how to count sequestration in formal carbon ledgers.

Mass timber construction begins with an inherent advantage over reinforced concrete in terms of embodied carbon. Producing a cubic meter of cross-laminated timber typically results in net emissions close to zero or even negative if the stored carbon is counted, compared to roughly 250 to 350 kilograms of CO₂ for a cubic meter of reinforced concrete and well over 1,000 kilograms for a comparable quantity of structural steel. Whole building comparisons show similar gaps. A mid-rise timber structure often comes in 20% to 40% lower in embodied carbon than its concrete counterpart, with studies of hybrid timber towers reporting reductions of up to 26% in global warming potential. The debate is not whether timber is lower carbon, but how much lower it is, and whether accounting for the carbon stored in the wood means the building’s construction phase can be considered not just low carbon but carbon negative.

Canada is only beginning to incorporate embodied carbon into its building codes. The 2025 National Building Code will introduce greenhouse gas objectives focused on operational emissions. Work is underway on how to handle embodied emissions from materials, with a goal of integrating limits or reporting requirements by 2030. Provinces and cities are moving faster. Vancouver has already set embodied carbon caps for new construction that will tighten over the decade. Quebec and British Columbia are considering similar measures for public projects. In each case the question is whether the carbon stored in timber should be subtracted from the totals or reported separately. So far the conservative answer has been to track it but not allow it to offset required emission reductions. That mirrors approaches in Sweden and parts of North America.

Export markets add another layer. Europe’s EN standards require reporting of biogenic carbon flows. In practice, a European environmental product declaration for a timber product shows negative emissions in the production stage due to sequestration and an equivalent positive emission at end of life. This makes the timing of carbon storage visible. France’s RE2020 regulation goes further and applies a dynamic method that gives a modest credit for delaying emissions. Sweden takes the opposite stance, requiring disclosure of stored carbon but excluding it from compliance limits to avoid double-counting with the national forestry carbon ledger. New Zealand will require embodied carbon reporting by 2025 and caps by 2026, and timber is expected to play a central role. Japan encourages timber through incentives and its J-Credit system, which allows projects to earn credits for using wood that increases carbon storage, even if building codes themselves do not count sequestration directly.

These examples highlight two important principles. The first is the time value of carbon. A ton of CO₂ released in 2075 has a smaller warming impact over this century than a ton released in 2025. By delaying emissions, mass timber buys time, and in climate policy time matters. France recognized this by weighting emissions based on when they occur. The second is avoiding double-counting. Carbon in wood products is already part of national greenhouse gas inventories under land use rules. If a country’s building sector also claims it as a removal, the same ton could be credited twice. Sweden avoided that by separating reporting of stored carbon from the compliance cap. Canada will face the same accounting challenge.

Design decisions can make the storage more credible. Detailing for durability, protecting timber from moisture, and integrating fire safety measures keep carbon in place longer. Designing for disassembly and reuse can extend storage well beyond the first life of a building. Ensuring that timber comes from certified sustainable forests maintains national carbon stock while allowing product-level benefits. If these conditions are met, the claim of carbon storage becomes stronger and easier to recognize in policy without undermining national accounts.

A practical Canadian model could combine these lessons. Require whole-building life cycle assessments aligned with EN 15804 so data is compatible with export markets. Set compliance caps on fossil and process emissions only, not allowing biogenic carbon to offset those limits. Require a separate disclosure of the amount of carbon stored in the building, and encourage optional dynamic reporting for projects that want to highlight the time value of delayed emissions. Such a framework would give transparency, maintain integrity in national accounting, and provide Canadian exporters with documentation that satisfies European and Asia-Pacific buyers.

The market implications are significant. European and Australasian rules are creating strong demand for low carbon materials. If Canadian producers can show with harmonized data that their timber products have low embodied emissions and store carbon in line with international rules, they will be more competitive. Buyers in France or New Zealand will have no trouble accepting Canadian EPDs if they match EN standards. Domestically, credible accounting reassures insurers, lenders, and public funders that timber projects are meeting climate goals. This lowers risk and accelerates adoption.

Lytton’s rebuild can be a model for this approach. By designing buildings that are durable, repairable, and ready for reuse, and by reporting both emissions and stored carbon clearly, the project can demonstrate how Canadian policy might work at scale. It can provide a template for federal and provincial programs and for export-oriented producers. Canada can rebuild communities, reduce emissions, and grow export markets if it makes sequestered carbon count in the right way. The opportunity is to align the story of Lytton with the trajectory of global carbon accounting, so that Canadian wood is recognized everywhere as both a building material and a climate solution.