Peatland Carbon Finance Scoping Study (NERR107)

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This report aims to understand the emerging market for peatland carbon finance. It considers the opportunities, risks and barriers that need to be addressed if the peatland carbon finance market in England is to reach its full potential.

Degraded peat is a significant greenhouse gas (GHG) source. Restoring peat to a good condition has the potential to significantly reduce GHG emissions as part of a net zero target and contributes to the peatland restoration target in the government’s Net Zero Strategy.

The report shows that private carbon finance can make a valuable contribution towards the costs of peatland restoration especially in the lowland. However, restoration is expensive, and landowners face a significant cashflow challenge.

The report’s recommendations set out the actions needed to enable the market to grow at the required pace. These include: the need for continued public funding; the new Environmental Land Management Scheme funding being designed to encourage and complement private carbon finance; price guarantees or loans that might help with cashflow problems; clarity for buyers of UK peat GHG abatement units about how these units can be used for net zero reporting; and awareness-raising among landowners to recognise the benefits of restoration, and market value of the resultant carbon units.

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NERR107 - Edition 1: Peatland Carbon Finance Scoping Study, PDF, 1.8 MB 2022/05/06