Abstract: The complete utilization of carbon compensation in the plantation system can facilitate the realization of a "carbon neutral" strategy. The study examined the spatiotemporal evolution of the carbon compensating rate in the plantation industry across 31 provinces (municipalities and autonomous regions) of China from 2006 to 2020. The regional differences, spatial correlation, and the impact of social, economic, environmental, and developmental factors were investigated. The analysis framework incorporated a system dynamics (SD) simulation model to assess the carbon-compensating potential of the plantation industry. The results showed that: (1) China's plantation industry exhibited a carbon compensating rate consistently above 1, with an overall fluctuating upward trend and an average level of around 5.3. (2) The carbon compensating rate of the plantation industry exhibited significant regional disparities, with the highest rate observed in the northeast region, followed by the western region, the national average, the eastern region, and the central region. At the provincial level, there was considerable variations in the level of carbon compensation, with a maximum difference of 11.60. (3) In terms of temporal changes, the carbon compensating level in Liaoning Province, Shandong Province, Hebei Province, Shanxi Province, Sichuan Province, Yunnan Province, and Guizhou Province had experienced a significant increase. However, it was worth noting that Beijing City had shown a decreasing trend in the carbon compensating level. (4) The carbon compensating potential of the plantation industry exhibited variations across different scenarios. The carbon offset rate showed an increasing trend from low to high in the following scenarios: ensuring food security development, conventional development, integrated development, and enhanced energy conservation and emission reduction development. However, the carbon compensating rate in the enhanced agricultural input development scenario demonstrated a decreasing trend. Based on these findings, the following recommendations were proposed as to optimize the structure of the plantation industry, to promote differentiated regional development, to establish a financial support system related to the reduction of agricultural pollutants, and to formulate reasonable and effective policies for the development of carbon reduction and sink enhancement. These recommendations support the utilization of the plantation industry's carbon compensation capacity and contribute to achieving a balanced carbon footprint in society.