The European Commission has today (Tuesday, April 14) approved a €1.3 billion German State aid scheme for rewetting of farmed peatlands.

The scheme aims to reduce greenhouse gas (GHG) emissions by increasing carbon storage in peatlands.

According to the commission, the draining of peatlands in Germany, which are currently used for agriculture and forestry, is responsible for 7% of annual GHG emissions.

"With this scheme, the German government aims to prevent further decomposition of the peat body and, where possible, to restore peat soils as natural carbon sinks," the commission said.

Peatlands

The scheme will support measures for the permanent and extensive rewetting of peatlands and for the subsequent agricultural and forestry use of peatlands at elevated water levels in so-called "paludicultures".

The commission said the measure will cover costs for preparatory advisory services, investments for the implementation phase, compensation for economic damage resulting from the rewetting and aid to establish paludicultures.

Under the scheme, the aid will take the form of direct grants and will cover up to 100% of eligible costs.

In a bid to incentivise the uptake of rewetting measures and to help establish a viable market for paludicultures, those who join the scheme within one year will be eligible for a 20% bonus.

The scheme will run until the end of 2029.

Scheme

In its assessment, the Commission found that the scheme facilitates the development of an economic activity and has an incentive effect.

It also said the positive effects outweigh any potential distortion of competition and trade in the EU.

Commenting on the scheme, European Commission executive vice-president for a clean, just and competitive transition, Teresa Ribera, said:

"The scheme that we approved today sets important incentives to develop new, sustainable value chains while taking all relevant stakeholders on board."