After doing some reading I discovered that there are apparently some performance problems with sprite3D at the moment? But also realised that this wasn't compatible from what I could see with multimesh. So instead I made a quadmesh and added a spatial material to it. Under flags I ticked transparent, under parameters I set billboard mode to Y-Billboard and ticked use Alpha Scissor, and then under albedo I set my texture to just a png which I got by rendering my tree model in blender with lighting etc within blender.
This gave the result of:
which is the effect I was after. I can do a bit more tweaking with the lighting as when I move the camera the lighting changes but for now it is fine and it runs at 60fps all day long. Hope that helps