Germany has received the green light from the European Commission for a €1.3 billion funding scheme aimed at restoring drained peatlands—an ambitious in the country’s effort

to curb greenhouse gas emissions and strengthen natural carbon storage.

Peatlands, waterlogged ecosystems rich in partially decomposed plant material, are among the planet’s most effective carbon sinks. However, decades of drainage for agriculture and forestry have significantly weakened their environmental role. In Germany alone, these altered peatlands account for roughly 7% of the country’s annual greenhouse gas emissions.

The newly approved scheme focuses on reversing that trend. Landowners and land managers will be incentivized to rewet drained peatlands, a process that halts peat decomposition and allows the land to regain its carbon-storing capacity. At the same time, the initiative promotes “paludiculture”—a form of agriculture adapted to wet conditions—enabling continued land use without compromising environmental goals.

Funding under the scheme will cover a wide range of costs, including advisory services, infrastructure investments, and compensation for potential income losses linked to rewetting. In some cases, support may cover up to 100% of eligible expenses. To accelerate participation, early adopters who join within the first year will benefit from a 20% bonus.

The program is open to a broad group of stakeholders, including private landowners, land managers, and operators of drainage systems. It is scheduled to run until the end of 2029.

The European Commission approved the plan under EU State aid rules, concluding that it meets strict criteria for necessity, proportionality, and limited market distortion. Officials emphasized that the environmental benefits—particularly in reducing emissions and restoring ecosystems—clearly outweigh any potential impact on competition within the EU.

Beyond regulatory approval, the scheme reflects wider EU backing for Germany’s climate transition. Through frameworks like the 2022 Agricultural Guidelines and the Common Agricultural Policy, the EU is actively supporting member states in developing sustainable land-use strategies. Germany’s peatland initiative aligns closely with the EU’s broader climate neutrality targets, reinforcing cooperation between national governments and European institutions.

As climate pressures intensify, projects like this highlight a growing shift toward nature-based solutions—where restoring ecosystems becomes a central pillar of climate policy.