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Value from the carbon market for the next land use of peat production areas´s Profile image

Value from the carbon market for the next land use of peat production areas

01.10.2023 - 30.06.2026
School of Forest Sciences, Faculty of Science, Forestry and Technology


Main funder

Value from the carbon market for the next land use of peat production areas funder logo

The project is funded by Just Transition Fund (JTF). The project is implemented by University of Eastern Finland, Geological Survey of Finland (coordinator), and National Resources Institute Finland.


1. Background

The need to reduce Finland’s and the European Union’s greenhouse gas emissions increases the pressure to direct areas to land use forms that preserve carbon reserves and to build systems where the landowner receives compensation for reducing emissions. Preservation of the peat carbon stock might offer long-term carbon credits either in state-led or voluntary compensation systems. The new market situation, in which the storage and sequestration of carbon has a salable value, brings new high-water-level after-use options to the consideration of the landowners, alongside the traditional post-use forms – afforestation and wetland pools – if only the operational methods and value chains can be made to work.

2. Objectives

The aim of the project is to find out the scientific and technical, legal and administrative, and economic conditions for obtaining value for the landowner and the rest of the local economy from the preservation of the peat carbon stock and from carbon sequestration through paludiculture and restoration at former peat extraction sites with thick residual peat layer. The project produces information on the climatic effects of the high-water-level land-use forms and compares them with the business-as-usual scenario based on the current land use. The project aims to create climate-friendly land-use models that generate financial benefits for the landowner and for the local entrepreneurs.

3. Implementation

The project (1 October 2023 – 31 June 2026) is implemented by the Geological Survey of Finland (GTK), University of Eastern Finland (UEF), Natural Resources Institute Finland (Luke) and Seinäjoki University of Applied Sciences (SeAMK). The project is carried out in cooperation with the landowners of the pilot sites. A startup company in the carbon compensation industry, whose founders have international experience in producing and trading climate units, is also a partner in the creation of the operating models.

The following types of land use and the value chains originating from them are under consideration:

1. Mire creation2. Short-rotation cultivation of willow with high water level, conventional cultivation as a control3. Cultivation of reed canary grass with high water level, conventional cultivation as a control4. Cultivation of Sphagnum moss5. Cattail (Typha spp.) paludicultureEach land use form is represented by one pilot site.

The project produces data on the total carbon balance and methane emissions for the considered land use forms and compares them to the business-as-usual regional scenario of South Ostrobothnia, which is based on the current land use. The project evaluates how the peat carbon storage will be best secured as in the long term and defines operational models for the pilot sites for monitoring the carbon balance and environmental impacts, as well as structures for measuring greenhouse gases.

The project maps and describes the means of control in accordance with current law for the land use forms and value chains selected for the project at the national level. In the project, justified regulation options are developed for the value chains (2-3 pieces) assessed as the most potential during the project in cooperation with the project partners. Assessment is made of how EU regulation affects or will affect them in the short or medium term. The project also structures the national legal framework related to the carbon market, which would be compatible with European Union regulations. A clear and unified concept supports the creation and operation of a reliable carbon market. The project produces information for decision-makers about the development needs of regulation options that can be used when developing systems in which the landowner receives compensation for carbon storage or carbon sequestration.

The project evaluates the potential of land use forms in generating income, including income from selling carbon credits in a carbon market. The project determines the business models and earning logic of value chains originating from the land use forms and evaluates the value chains’ financial result, the effective interest rate of investments, the net present value of investments and the net carbon benefit.

The project increases the know-how of landowners and entrepreneurs about the land uses suitable for preserving the peat carbon storage, as well as the economic possibilities and legal-administrative requirements of wetland paludiculture and restoration. Landowners and entrepreneurs interested in the business opportunities of the carbon market will meet with each other at events, seminars and excursions organized by the project, which enables the development of local value chains. The information produced in the project will be distributed to local landowners and entrepreneurs and will be published as reports and scientific publications.