Ireland is home to a significant portion of Europe's peatlands. Owing to their carbon-capturing properties, peatlands have the potential to reduce national emissions by 5%. However, peatland restoration is not always sufficiently incentivised. Peatland Finance Ireland offers an innovative model for funding and rewarding peatland restoration that mobilises all stakeholders.
Peatlands: An Impressive Nature-Based Solution
Healthy, functioning peatlands are terrestrial wetland ecosystems in which waterlogged conditions prevent plant material from fully decomposing, resulting in an overall accumulation of peat. Peatlands are excellent stores of carbon. Over time, they store significantly more carbon than tropical rainforests. Owing to a mild and wet climate, Ireland retains a high proportion of temperate peat soils of varying levels of conservation status. This ranges from fully functioning raised and blanket bogs with active peat-forming sphagnum mosses, through partially degraded cutaway and cutover peatlands formerly used in artisanal or commercial peat extraction, to highly modified peat soils now under agricultural grasslands or forestry.
In addition to carbon storage, peatlands provide flood attenuation, water filtration, and places for leisure and recreation which contribute to the wellbeing of communities. Furthermore, their oxygen-free environment offers perfect conditions for the natural preservation of archaeological artefacts made from wood, leather and other organic materials, resulting in stores of history and cultural heritage that connect communities to their past.
Decades of peatland drainage and peat extraction for fuel and horticulture have resulted in both habitat degradation and carbon emissions. Peatland restoration has the potential to lower these emissions significantly.
The Many Challenges
Ireland currently holds a large proportion of Europe’s remaining functional peatlands. Ireland’s ‘deep peat’ raised bogs cover up to 1.5 million hectares. Deep peat bogs are those with a peat depth of several metres (up to 10 m in some places), meaning they are incredibly important for carbon storage. However, at least 30% of these areas have been drained, forested, harvested or converted to pasture, and only a fraction of what remains is protected. These activities can lead to peatlands becoming dry and degraded, and consequently unable to store carbon. Dry and degraded peatlands can also result in increased carbon emissions.
Currently Irish peatlands emit more than 2.3 megatonnes of carbon dioxide (MtCO2) per year (excluding use in horticulture or eventual peat burning). Half of this comes from peat soils under grasslands and one third from domestic peat extraction. With effective restoration, healthy peat soils in Ireland have the potential to capture and store (sequester) up to 4.5 MtCO2 per annum., thereby removing more than 5% of national emissions.
Following the cessation of commercial extraction, local communities require incentives to engage with peatland restoration. Commercially-viable, community-led peatland initiatives have the potential to both restore habitats and make positive economic contributions to local communities who are being encouraged to forego the use of a highly affordable fuel source. However, funding in the form of working capital is needed to restore the peatlands. Reducing emissions is a national priority currently using government spending through direct exchequer, carbon tax revenues and a small proportion of the Irish Sovereign Green Bond (the ISGB is designed to provide investors with the financial features of a standard Irish Government Bond combined with sovereign Green Bond market practices). Establishing a resilient model for large-scale peatland commodification is required, as current models do not meet the amount of funding needed for restoration, nor do they yet capitalise on the significant amount of finance available for the broad range of ecosystem services offered by healthy peatlands.
Full of Opportunities
Currently, due to their dry, degraded state, Irish peatlands act as a carbon source, emitting 2.3 Mt of carbon annually. With careful investment and restoration, there is an opportunity to convert Ireland’s peatlands into carbon sinks that would not only stop emitting carbon but would capture up to 4.5 Mt of carbon per year.
Four primary strategies are employed to restore peatland systems:
Ending energy extraction from peatlands: Harvesting peat for burning results in damaged peatlands and consequently carbon emissions, as well as increased emission from the burning of that peat for energy.
Removing planted forest on peat: Forestry activities on peat soils are very damaging to the structure of bogs and emit significantly more carbon than undisturbed peat, as well as negatively affecting hydrology and water quality further downstream. Care is required, as the action of removing these trees emits significant amounts of carbon in itself.
Restoring peatlands on farms: The agriculture sector owns/uses at least 437,000 ha of Irish peat soils. The primary modern use of peatlands for agriculture is either sheep grazing on upland blanket bogs, or the conversion of large areas of former raised bogs to grassland pasture and silage production. While these areas remain drained, they continue to emit carbon.
Post-production restoration: Some peatlands that were used for energy extraction, forestry and agriculture can be restored using a variety of innovative techniques. Methods such as drain blocking can help a peatland to return to a functioning, healthy wetland that eventually captures and stores carbon.
There exists a valuable commercial opportunity to generate carbon credits, demonstrate water benefits and restore vital biodiversity. In order to achieve this, a diverse and resilient community-led commercial model needs to be developed which is both regionally adapted and scalable in nature.
Preliminary investigations by Peatland Finance Ireland suggest that most feasible restoration actions can be conducted for less than €5/tCO2e against a current national price for carbon of €33.5/tCO2e or an EU Emission Allowance price of €50-60 EUR/tCO2e. Furthermore, this can be achieved by replacing at least part of the €29M in annual government expenditure on carbon credit purchases by Irish companies who have committed to the international standard science-based targets (SBTi). Consultations with Irish industry show potential for similar investable projects and scaling pathways in the energy, forestry, agriculture and water sectors. Peatland Finance Ireland will investigate all four of these sectors.
