Peat has played an important part in daily life across Scotland for centuries. It has been used as building material, a source of fuel, an ingredient in whisky production and a form of compost in horticulture. Beyond its practical uses, peat has a prominent place in Scottish culture, featuring in visual art, music and literature. In other instances, peatlands have been seen as an obstacle to overcome, evidenced by efforts since the 18th century to dig out or drain peat bogs and convert them to farmland and commercial forestry plantations.

However, in the 21st century, attitudes towards peatlands have seen a major shift, primarily due to the twin challenges posed by climate change and biodiversity loss. Specifically, peatlands have become increasingly recognised as an important habitat and terrestrial carbon store. As scientific research into carbon storage and biodiversity on peatlands has developed, conservation efforts to protect and restore peat bogs has increased and received significant funding support from the Scottish Government. More recently, the implementation of the Peatland Code has created a mechanism for private finance to fund restoration activities, which has created an active market for carbon credits generated from these schemes.

International importance

The growing recognition of peatlands as an internationally important habitat is perhaps best demonstrated by the Flow Country in Caithness and Sutherland becoming Scotland’s seventh UNESCO World Heritage Site, and the world’s first ever peatland site to be granted this status. On a national scale, the Scottish Government has committed £250 million over a 10-year period from 2020, with the aim of restoring 250,000 hectares of degraded peatland by 2030.

As we approach the halfway stage of this funding commitment, Scottish Government data state that the average rate of peatland restoration has doubled in the past two years, with the 2023-24 financial year seeing a total of 10,360 hectares of degraded peatland restored.

However, a significant increase in restoration projects will be needed in the coming years if the 250,000-hectare target is to be met. With public finances for nature-based projects coming under increasing pressure, private finance will hold the key to meeting these targets.

Opportunity for natural and cultural heritage

Whilst the Peatland Code has faced some ‘buy side’ challenges associated with the Science Based Targets Initiative’s (SBTi) position on emission reduction carbon credits, the market continues to develop and offers good opportunities for project developers to generate alternative revenue streams and meet their net zero targets. Furthermore, peatland restoration provides an opportunity for landowners and land managers to contribute to the next chapter of this important part of Scotland’s natural and cultural heritage.

Galbraith are involved with a number of peatland restoration projects are well placed to advise landowners and land managers on opportunities in this sector.

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