Changes in peat field cultivation and peatland forest management support the achievement of the goals set in the Climate Act

The goal set in Finland’s Climate Act is to achieve carbon neutrality, meaning a situation where greenhouse gas emissions are equal to or smaller than removals, by 2035. By changing the processing of peatlands and adjusting water management, emissions reductions could be achieved cost-effectively without placing wood production and food security at risk.

The land use sector has turned from a sink into an emission source which makes it more difficult to achieve the Climate Act’s goal. Significant emissions reductions can be achieved in peat fields and peatland forests.

In the policy brief published in 2023, research scientists present three changes to control measures to achieve significant emissions reductions:

1. Paying farmers for investments in the re-wetting of peat fields and supporting paludiculture in the same way/with the same principles as other uses of fields. Removing subsidies from fields that are not harvested.

2. Supporting the development of markets for products based on paludiculture. This calls for support for research and development covering the entire value chain and the access of products onto markets.

3. Changing the forestry subsidy system to be independent of the forest regeneration method, providing training for forest contractors, and increasing information-based guidance for forest owners regarding continuous cover forestry.

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The opportunities of paludiculture improved slightly in 2023, as farmers will not lose subsidies due to excessively wet fields during the current subsidy period. In addition, two new measures have been introduced: climate wetlands for peat fields, meaning the payment of wetland subsidies in place of agricultural subsidies, and grasslands for peat fields as part of the environmental compensation scheme. However, not enough funds have been allocated to the measures, due to which only minor emissions reductions can be expected.

Funding allocated especially to re-wetting, paludiculture or related R&D is still not available, even though emissions reductions based on bidding processes are considered to be very cost effective. Furthermore, the subsidy system has not been changed in terms of hectare-based subsidies. This means that roughly 10% of farms receive subsidies without producing any food.

The new incentive scheme for agriculture introduced in 2024 does not include subsidies allocated to continuous cover forestry. At the same time, subsidies for forestry based on rotation periods have remained unchanged which means that the new incentive scheme also supports it. Subsidies are available for peatland forest management after regeneration, but remedial ditching will no longer be supported. This may increase forest owners’ interest in continuous cover forestry because it is usually possible without any remedial ditching.

Changes in the use of peat fields could best be pushed in a climate-positive direction if payments equalling the value of emissions reductions achieved could be made for measures aimed to reduce emissions. In this case, poorly productive peat fields in particular could be excluded from the scope of cultivation and agricultural subsidies if this was profitable for farmers. At the same time, the use of public funds would be more effective, and poorly productive peatlands would no longer be covered by agricultural subsidies or form large emission sources.

The agricultural subsidy system includes various conditions and control measures to maintain fields in production, prevent decreases in their productivity, and reduce environmental pollution. These conditions have not been correct or sufficient for peat fields and their emissions to water and air. The re-wetting and other restoration of peat fields not only produces climate and water benefits but also increases biodiversity. 

The implementation of the EU Nature Restoration Law in Finland may cause significant changes in the use of at least some peat fields in the coming decades. According to the Law, this must take place through positive incentives; however, in such a way that no-one needs to suffer or be in an unreasonable situation due to the changes.