Towards Resilient Peatlands: Integrating Ecosystem-Based Strategies, Policy Frameworks, and Management Approaches for Sustainable Transformation

Abstract

This paper examines the critical importance of peatlands in climate regulation, biodiversity conservation, and the provision of essential ecosystem services, emphasizing the urgent need for their preservation and restoration. Although peatlands cover just 3% of global land, they store 30% of the world’s terrestrial carbon, making them vital for mitigating climate change. However, activities such as agriculture, forestry, and peat extraction have caused significant degradation, compromising their ecological integrity and climate functions. This review makes a unique contribution by applying a systems thinking approach to synthesize the interconnected technical, environmental, and socioeconomic dimensions of peatland management, an often underrepresented perspective in existing literature. By offering a holistic and integrative analysis, it identifies key leverage points for effective and sustainable conservation and restoration strategies. This paper also explores the European Union’s policy response, including the EU Restoration Law and sustainability initiatives aimed at peatland recovery. It highlights the shift from peat use in energy production to its application in horticulture, reflecting growing demand for sustainable alternatives and eco-friendly restoration practices across Europe. Furthermore, this review addresses the environmental consequences of peat extraction, such as increased greenhouse gas emissions and biodiversity lossand emphasizes the need for robust EU legislation aligned with climate neutrality and biodiversity enhancement goals. It concludes by advocating for comprehensive research and proactive, policy-driven measures to ensure the long-term protection and sustainable use of these vital ecosystems.

1. Introduction

Peatlands are pivotal in regulating the global climate through their significant carbon storage capacity. As the foremost natural terrestrial carbon stores, they have sequestered vast amounts of carbon from the atmosphere since the last glaciation period [1]. However, their degradation due to human activities, such as drainage, peat extraction, and land conversion for agriculture and forestry, has led to substantial carbon emissions, biodiversity loss, and environmental disruption [2]. In Europe, nearly 50% of peatlands have been degraded, with emissions from drained peatlands contributing significantly to greenhouse gas (GHG) emissions [3].

The shift in peatland’s over-time use reflects both historical dependencies and modern environmental challenges. Traditionally, peat was extracted for energy production, but its primary use has shifted toward horticulture, where it serves as a growing medium [4]. Peat is generally considered a non-renewable resource due to its slow regeneration rate, though the Intergovernmental Panel on Climate Change (IPCC) categorizes it in a unique category between fossil and renewable resources. While peat extraction accounts for only 0.4% of global peatlands, its GHG emissions are disproportionately high due to the release of stored carbon when peatlands are disturbed [5]. The European Union (EU) has increasingly recognized these impacts, leading to significant policy responses such as the EU Restoration Law, which sets binding targets for peatland restoration in alignment with broader objectives under the European Green Deal and climate neutrality commitments. Yet, despite growing awareness and policy development, peatland management continues to face critical challenges. These include the limited effectiveness of restoration techniques, conflicting land-use priorities, and a lack of integrated data on peat extraction and long-term recovery.

This review arises from the need to overcome these enduring gaps by applying a comprehensive, cross-disciplinary approach. Current approaches to peatland conservation often operate in silos, addressing ecological, technical, or socioeconomic aspects in isolation. In contrast, this paper employs a systems thinking approach, a conceptual framework that emphasizes the dynamic interconnections between ecological systems, policy frameworks, economic drivers, and social contexts. By applying this approach, this review seeks to unpack the complexity of peatland degradation and restoration and to identify strategic leverage points for more sustainable, evidence-based decision-making.

Specifically, this review examines the ecological significance of peatlands, the extent and drivers of their degradation, and the evolving landscape of restoration policies and practices within the EU. Through the systems thinking lens, it evaluates the interdependencies among technical solutions, environmental goals, and socioeconomic trade-offs, offering a comprehensive framework for advancing sustainable peatland management in Europe.

2. Peatland Ecology, Distribution, and Degradation

2.1. Peatland Formation and Types

Peat is a substance formed through the accumulation of dead organic matter, primarily consisting of plant fragments. Unlike sediments moved by water, ice, or wind, peats are unique in that they form in stationary conditions in peatlands. These waterlogged areas impede the decomposition of organic materials, which allow for the accumulation of peat. The process of peat formation is gradual and occurs in environments where the accumulation of organic matter exceeds the rate of decomposition, often due to poor drainage.

Peat varies in composition depending on the geographical region. In arctic, subarctic, and boreal regions, moss peat predominates; in temperate areas, reed, sedge, and forest peat are more common; and in the humid tropics, mangrove and swamp forest peat are found [6]. Peatlands themselves are ecosystems characterized by the accumulation of decomposed organic material. These ecosystems are shaped by a combination of hydrology, soil chemistry, and vegetation, which, together, govern the peat-forming processes.

Peatlands are primarily classified into two types: fens and bogs. Fens are minerotrophic, receiving water from mineral-rich sources; whereas bogs are ombrotrophic, primarily receiving water from precipitation. Bogs are typically more acidic and are dominated by peat mosses, while rich fens are less acidic and often support a more diverse array of plants. True mosses are usually the most abundant component of undecomposed peat in rich fens [7].

2.2. Peatland Distribution Degradation in Europe

Europe holds a uniquely pivotal role in the global context of peatland conservation. Although covering a relatively small portion of the Earth’s land surface, European peatlands are among the most degraded worldwide, with nearly 50% affected by human activities. Yet, the region also leads global restoration efforts, with forward-looking policies such as the EU Restoration Law and the European Green Deal setting ambitious targets for ecological recovery. Europe’s peatlands are ecologically diverse, encompassing bogs, fens, and mires across different climate zones, and are critical not only for carbon sequestration but also for water regulation and biodiversity. This dual status as both a major contributor to peatland degradation and a leader in innovative policy response makes Europe’s peatland landscape exceptionally significant on the global stage.

Globally, peatlands cover approximately 4.23 million km², which represents about 2.84% of the Earth’s land surface [8]. Although they occupy a small fraction of the Earth’s land area, peatlands are crucial in the global carbon cycle, acting as significant carbon sinks. However, around 12% of these peatlands no longer contribute to peat formation, resulting in considerable carbon loss. The rate of peatland degradation is particularly high in Europe, where nearly 50% of peatlands have been affected by human activities [3].

Peatland degradation is a significant environmental issue as it leads to increased carbon emissions. In certain European countries, the degradation is severe, with 91% to 100% of peatlands affected by activities like agriculture, peat extraction, and forestry. However, there are notable geographical differences. In some regions, less than 20% of peatlands are degraded, demonstrating that successful management practices can make a significant difference in peatland conservation [3].

In central Europe, peatland drainage poses a major environmental challenge, contributing to nearly 25% of the EU agricultural GHG emissions despite representing just 3% of the agricultural land area. This activity significantly affects water quality, drinking water supplies, and biodiversity [9]. Annually, peatland degradation leads to the production of around 2000 Mt CO₂eq of GHGs, or 4% of global anthropogenic emissions [10]. The agricultural sector has been one of the major contributors to peatland degradation, with countries like Hungary, Greece, the Netherlands, Germany, and Poland being the most active in utilizing peatlands for agricultural purposes. Conversely, countries such as Belarus, Lithuania, Ukraine, and Ireland have not been as active in converting peatlands into agricultural lands. Finland, Sweden, and the UK have the lowest percentages of peatland use for agriculture, indicating varied management approaches across Europe [9].

Central European peatlands have been heavily impacted by drainage, tillage, and fertilization, leading to peat shrinkage and loss of organic matter. Forestry is the second-largest land-use activity in the European peatlands, particularly in the Nordic and Baltic states, which have large areas of peat bogs and fens. Fens are less acidic than bogs and support a more diverse plant community, including graminoids, brown mosses, conifers, and deciduous trees. The term mire is often used to refer to both acid bogs and alkaline fens, ecosystems where peat accumulation is still ongoing. These ecosystems are crucial not only for carbon sequestration but also for regulating greenhouse gas fluxes and supporting biodiversity [11,12].

In Latvia, peatlands cover a significant portion of the country, with 9232 km² of peatland, of which 3165 km² are classified as mire areas. Of the total peatland area, 6066 km² is degraded, and only 10 km² has been restored [13]. The total peat deposit in Latvia is estimated at 1.7 billion tons, with 145.7 million tons of peat having been harvested by the start of 2019 [14].

Latvia’s peatlands are categorized as intact, degraded, and restored, each reflecting the varying ecological integrity of the peatlands. Intact peatlands are still functional and preserve their ecological benefits, such as carbon sequestration and biodiversity conservation. However, a significant portion has been degraded due to human activities like agriculture, forestry, and peat extraction. The restored areas are still limited compared to degraded ones but represent ongoing efforts toward ecological rehabilitation.

Historically, peat has played an important role in Latvia’s economy, used for heating, soil improvement, and as bedding material [15]. Today, the majority of peat extraction is aimed at industrial uses, particularly in horticulture. While peat continues to be an important resource for agriculture, horticulture, and energy production, its intensive exploitation is a leading cause of peatland degradation. Approximately 7.7% of Latvia’s agricultural land and a large portion of its forests are located on drained peatlands, which signifies significant human intervention [15].

The degradation of peatlands, especially in Europe, presents significant challenges, but it also provides opportunities for improving peatland management and implementing restoration strategies. The situation in Latvia highlights the difficulties of balancing peatland use for economic activities like agriculture and horticulture with the need for conservation and restoration efforts. Effective management practices, informed by scientific research, policy frameworks, and socioeconomic considerations, will be essential for achieving the restoration and conservation goals needed to maintain the ecological functions of peatlands.

3. Policy Framework for Peatland Management in Europe

Peatlands are a key focus of European conservation efforts due to their environmental significance. In response, the European Union has developed legislative frameworks and restoration targets to protect and restore the peatland ecosystems.

3.1. EU Policy Initiatives for Peatland Restoration

In 2022, the European Parliament introduced the Nature Restoration Law, establishing legally binding restoration targets across various ecosystems, including peatlands, forests, grasslands, rivers, and coastal areas [16]. This law aligns with the EU’s broader environmental and climate goals, including the Biodiversity Strategy for 2030, which calls for restoring at least 30% of degraded habitats by 2030. The Climate Change Adaptation Communication of 2021 further emphasizes the need for cost-effective, nature-based solutions, such as the following [17]:

• Protecting and restoring wetlands and peatlands;
• Enhancing ecosystem resilience;
• Developing green infrastructure;
• Sustainably managing farmlands and forests to mitigate emissions.

The EU has set ambitious targets to reduce net greenhouse gas (GHG) emissions by at least 55% by 2030, with the land-use sector (LULUCF) playing a critical role in achieving this goal [18]. Several legislative instruments directly or indirectly influence peatland conservation, restoration, and management, including, Natura 2000, the Environmental Impact Assessment Directive, Cross-compliance and Greening under the Common Agriculture Policy, the Water Framework Directive, the EU Flood Directive, Climate and Land Use Policies, Renewable Energy Policies, and initiatives for peat in horticulture and specific incentive schemes, alongside the LIFE financial instrument.

The Nature Restoration Law sets targets for peatland restoration to mitigate climate change and biodiversity loss, aiming to restore 30% of drained peatlands by 2030, 50% by 2040, and 70% by 2050, with significant portions to be rewetted. These efforts align with the EU’s broader ecosystem restoration goals and its international environmental [19,20,21]. Despite the EU’s commitment to peatland restoration, the implementation of these targets has encountered political resistance and stakeholder concerns, particularly from the agricultural sector.

One of the primary challenges is the impact of rewetting on agricultural land use, as many drained peatlands are currently used for farming. Rewetting these areas could reduce land productivity, affecting food production and rural economies, and leading to opposition from farmers and industry stakeholders. Additionally, the high economic costs of restoration pose a significant barrier, as restoring degraded peatlands requires substantial financial investment, and some member states lack sufficient funding to support large-scale efforts. Moreover, conflicts with landowners have emerged, as restrictions on drained peatlands limit their use, raising concerns over property rights and compensation. In response, the EU has introduced financial support mechanisms, including the LIFE program, Common Agricultural Policy (CAP) Eco-Schemes, and Just Transition Funds, to assist member states in implementing restoration initiatives and addressing economic challenges [22,23].

3.2. National and Regional Policy Approaches

While the European Union has set ambitious goals for peatland restoration, the implementation of these policies varies across member states. Each country faces unique environmental, economic, and political challenges, influencing the way restoration efforts are designed and executed. Some nations have embraced large-scale peatland recovery projects, while others struggle with land-use conflicts and financial limitations.

In Sweden, the target is set to rewet at least 50% of the country’s peatlands by 2030, focusing on 100,000 hectares of forested peatlands and 10,000 hectares of agricultural land. Norway, on the other hand, has concentrated its efforts on protecting nature reserves and restoring degraded bogs, aiming to rehabilitate 15% of the country’s damaged ecosystems by 2025. Between 2015 and 2021, Norwegian restoration programs successfully restored 105 bogs by blocking drainage ditches and re-establishing natural hydrology [10].

The United Kingdom has also taken an active role in peatland conservation. Through the England Peat Action Plan, the country aims to restore 280,000 hectares of peatlands by 2050 as part of its broader Net Zero strategy. Meanwhile, Scotland has committed £250 million to rewet 250,000 hectares by 2032, recognizing the crucial role of peatlands in carbon storage and biodiversity conservation.

Germany, where drained peatlands contribute significantly to national CO₂ emissions, has pledged to cut these emissions by 5 million tons by 2030. Similarly, Denmark has made peatland restoration a priority within its agriculture transition agreement, requiring the rewetting of 58% of organic-rich soils by the end of the decade.

In the Baltic region, peatland restoration efforts are also gaining traction. Lithuania has committed to restoring 8000 hectares of degraded peatlands by 2026, focusing on reducing emissions and improving wetland biodiversity. Neighboring Latvia has set a target to rehabilitate 26,000 hectares of former peat extraction sites by 2030, balancing environmental recovery with the economic realities of peat production [15].

Despite these commitments, many countries face significant hurdles in meeting their restoration goals. Funding limitations, land-use conflicts, and stakeholder resistance often slow down progress. Ultimately, while national policies are moving in the right direction, more effort is needed to overcome financial and political barriers. Collaboration between governments, scientists, and local stakeholders will be essential to ensuring long-term peatland recovery and achieving the EU’s broader climate and biodiversity objectives.

3.3. Regulations on Peat Extraction

Beyond restoration efforts, many European countries are also adopting stricter regulations on peat extraction, particularly in the energy and horticulture sectors. As scientific evidence mounts on the high carbon footprint of peat use, governments are under pressure to phase out peat harvesting and transition to more sustainable alternatives.

The United Kingdom has been a frontrunner in regulating peat use, especially in the horticulture industry. As early as 1995, the UK introduced targets to reduce peat in growing media, aiming for a 40% reduction by 2005 and 90% by 2010. More recently, the government has taken a stronger stance, announcing a ban on retail peat sales starting in 2024, with a full phase-out for professional growers by 2028 [24].

Germany, which has historically been one of the largest consumers of peat for horticulture, has also committed to phasing out peat extraction. Under its National peatland Strategy, adopted in October 2022, the country plans to completely end peat extraction by 2040 and gradually phase out its use in horticulture between 2027 and 2031 [25].

However, the transition away from peat is not without challenges. Many industries, particularly in horticulture, remain heavily reliant on peat, and finding viable alternatives has proven difficult. Materials such as coir, wood chips, and composted bark are increasingly being used as substitutes, but supply shortages, higher costs, and quality inconsistencies have made large-scale adoption difficult. The shift away from peat is also creating economic disruptions in regions where peat extraction has historically been a major employer, leading some governments to introduce compensation and transition programs for affected workers.

Another concern is the increasing reliance on peat imports from non-EU countries, as local extraction is phased out. This raises questions about sustainability and carbon leakage, as imported peat may still contribute to emissions and biodiversity loss in other parts of the world. Some experts argue that stronger sustainability certifications and international trade agreements will be necessary to ensure that the EU’s shift away from peat does not simply shift environmental harm elsewhere.

4. Extraction, Trade, and Application of Peat in the Horticulture and Energy Sector

4.1. Extraction and Market Dynamics of Peat

To implement the peatland restoration measures set by the EU, the understanding of the current scale of peat extraction and use is essential to assess the potential impact on peat-based industries and the overall socioeconomic situation. Around 80% of peat extraction worldwide takes place in Europe [4]. According to the Eurostat data, peat is produced in 11 EU countries—Germany, Estonia, Finland, Ireland, Latvia, Lithuania, Poland, Sweden, Denmark, Spain, and Romania. The total amount of extracted peat in the EU27 in the period from 2013 to 2021 is shown in Figure 1a. In 2021, total peat production in the EU amounted to 10.2 million tons. Nevertheless, the European peat market is showing a downward trend by the targeted regulatory strategy to reduce peat production and consumption in the EU. During the last decade from 2010 to 2019, the average total amount of extracted peat in EU27 was 17.4 million tons per year. A negative trend in terms of peat production is evident also worldwide. Peat extraction across Europe is decreasing following concerns over climate change and biodiversity loss announced by the EU Council in 2018. An increasing number of EU policies include the management of drained peatlands as an essential solution for the reduction of GHG emissions and climate change mitigation. New policies are moving towards responsible use of peat resources and strongly discourage peat extraction. All the recent announcements have affected the European peat market considerably. The leading peat producer in the EU in 2021 was Germany (3228 kt) followed distantly by Finland (1582 kt), Latvia (1248 kt), Poland (1238 kt), and Estonia (906 kt) (Figure 1b).

Peat extraction across Europe is decreasing following concerns over climate change and biodiversity loss announced by the EU Council in 2018. An increasing number of EU policies include the management of drained peatlands as an essential solution for the reduction of GHG emissions and climate change mitigation. New policies are moving towards responsible use of peat resources and strongly discourage peat extraction. All the recent announcements have affected the European peat market considerably.

Although Finland has been the major producer of peat in Europe for a long time, significant changes in the top producers of peat in Europe can be observed in the last couple of years (Figure 2). Rearrangement of leaders took place in 2020 following the decision to cut out peat from energy use in Finland resulting in a considerable reduction in peat extraction volume. A more than fourfold decrease in peat extraction was observed in Finland in 2021 compared to 2018. An even greater reduction of peat extraction took place in Ireland decreasing by more than six times compared to the 2018 volume following the decision to start phasing out the harvesting of peat to produce heat and electricity by 2030. Peat production in Germany has been relatively constant with moderate growth in the past years; however, Germany came out on the top in 2020 due to the decrease in peat extraction in Finland and Ireland.

Total consumption of peat in the EU in 2021 reached 8365 kt. The largest consumer of peat by far was Germany, with a total consumption of 2549 kt of peat, accounting for 30% of the total peat consumed in the EU (Figure 3a). Poland and Finland shared second and third place, respectively, with 17.8 and 15% of the total consumption.

Similar to production, the domestic consumption of peat in the EU has undergone major changes in the last couple of years (Figure 3b). The greatest changes in consumption can be seen in Finland and Ireland due to the cut of peat used for energy. In other European countries, peat consumption has been showing a relatively flat trend with a slight increase in consumption in some countries (Germany, Poland) but a decrease in others (The Netherlands). Peat exports have shown an upward trend in the EU in the last decade (Figure 4). The top five peat exporting countries in 2021 were Latvia, Germany, the Netherlands, Estonia, and Lithuania (Figure 6). The leading country, Latvia, exported 2235 thousand tons of peat, followed by Germany with 1726 and the Netherlands with nearly 1500 thousand tons.

Similar to exports, imports of peat have experienced growth in the last decade, although the volume of imported peat is significantly smaller (Figure 4). The largest importer of peat by far is the Netherlands, reaching 2279 thousand tons in 2021, more than double the share of the second-largest importer, Germany (1048 kt, Figure 5). Italy, France, and Belgium imported 697, 630, and 571 thousand tons of peat, respectively.

Imports of peat have stayed relatively constant in recent years with, no change in the top importing countries (Figure 6). An increase in peat imports in recent years can be observed in Italy. According to the IndexBox [26] the average export price of peat in the EU was USD 126 per ton in 2021, showing an increase of 5.7% compared to the previous year.

Figure 6. Dynamics of the leading peat importers during the past five years.

Figure 6. Dynamics of the leading peat importers during the past five years.

The import price amounted to USD 119 per ton, growing by 9.2% compared to the previous year. According to TrendEconomy [10], the total value of peat (2703) exports from the EU reached USD 447 million in 2022, going up by 0.558% compared to 2021. The value of imports of peat (2703) to the EU was USD 52 million in 2022. Sales of peat to the EU went up by 7.88% compared to 2021.

According to TrendEconomy [27], the largest amount (in terms of value) of peat from the EU was exported to China (21%), the United Kingdom (7.02%), the USA (5.15%), Saudi Arabia (4.48%), and Switzerland (4.12%); whereas the largest exporters of peat (in terms of value) into the EU were Belarus (59%), Russia (17.1%), the United Kingdom (13.2%), Ukraine (5.26%), and Bosnia and Herzegovina (1.75%). A further decrease in peat extraction is expected in the near future following decisions to phase out the peat used for energy as well as the replacement of peat in growing media mixes.

Peat extraction is intrinsically linked to peatland drainage as the removal of peat requires lowering the water table to access the material, effectively halting peat accumulation and transforming carbon sinks into carbon sources [28]. This practice significantly contributes to greenhouse gas emissions, biodiversity loss, and long-term land degradation [29]. Despite declining extraction volumes in recent years due to policy shifts, the ecological impact of historically drained and currently exploited peatlands remains substantial. Rewetting these drained sites has emerged as a critical restoration strategy to reverse environmental damage and re-establish peatland functions [30]. However, rewetting efforts in former extraction areas often face practical challenges, including altered hydrology, residual soil compaction, and conflicting land-use interests [31]. While some countries, like Ireland and Germany, have initiated large-scale rehabilitation programs for post-extraction peatlands, such measures are have not yet been uniformly adopted across Europe. Integrating rewetting into peatland management plans, particularly in areas of ongoing horticultural extraction, is essential for achieving long-term climate and biodiversity goals outlined in EU environmental policy [32].

4.2. Peat Use in Horticulture and Energy Production

Since the 1950s, peat has become the main constituent of horticultural growing media [4] and is widely used in the pot plant industry, as a soil conditioner, and an organic fertilizer [33]. Peat is one of the most important growing media constituents due to its low cost, high availability, and suitable physiochemical properties. As a soil conditioner, pet can improve soil chemical properties and structure (e.g., pH, level of nutrients, oxygen supply) as well as water retention and drainage capability [34].

In peat-rich countries such as Finland, Germany, Ireland, Sweden, and the UK, domestic peat resources provide horticultural companies with peat for their needs. On the other hand, countries such as the Netherlands, Belgium, France, Italy, and Spain depend on imports of peat or peat-based growing media to sustain their horticultural sector [35]. Europe, especially the Baltic States, is by far the main supplier of peat and peat-based growing media in the world [36]. Peat for horticultural purposes is intensively traded in Europe. Most of the end consumption of peat in the form of growing media in the horticultural production sector or by private gardeners takes place in Western Europe, with the Netherlands and Germany being the main consumers [36]. On the other hand, peat production is taking place mainly in the Central, Northern, and Baltic states. Exports of peat to other EU and non-EU countries represent 85% of the extracted volume. In comparison, imports from outside Europe are very limited [36]. The trade of horticultural products within Europe is also important: exports of horticultural products within Europe represent around 50% of the European horticultural production in value [36].

Peat is the predominant growing medium constituent used in Europe, accounting for 75% of the volume [37,38,39]. The latest data on growing media production in Europe were provided by Schmilewski [38]. This study reported that the total growing media production in Europe was around 35 million m³ in 2013; no more-recent data on the production of growing media could be found. These data are in accordance with another survey by Altmann [37]. Around 20 million m³ are used in professional horticulture, whereas 15 million m³ are in the hobby market [38].

Germany leads as the primary producer of growing media within the European Union, with the Netherlands and Italy following in production capacity [38]. The dependence on imported peat for growing media production is notable in these countries, highlighting the international dynamics of peat trade. Germany and the Netherlands not only dominate in production but also consumption of these growing mediums [36].

Peat’s contribution to growing media mixtures shows significant variation across Europe. For instance, Denmark and Ireland see peat making up 87% of their growing media, with even higher percentages in Finland (88%), Latvia (92%), and astonishingly, nearly all (99%) in Estonia and Lithuania. This contrasts sharply with Italy and the United Kingdom, where peat constitutes a smaller fraction of the media composition, 64% and 54%, respectively [38]. The Netherlands plays a pivotal role in the European growing media market, despite having ceased domestic peat extraction [36]. Its substantial horticultural sector, which boasts a turnover of 6 billion euros and leads globally to cut flower production, demands significant volumes of growing media [40]. The country’s reliance on peat imports underlines the critical need for these materials in supporting its horticulture industry, which is also a significant producer of container plants. The Dutch horticulture sector’s reliance on a steady supply of growing media underscores the strategic importance of peat and its substitutes in maintaining the country’s leading position in global horticulture [41].

The use of peat for energy production has a long history in Europe, especially in countries with large peat resources [37,42,43]. Until very recently, in several Nordic countries and Ireland, and to some extent in the Baltic states, peat provided an important source of heat and power [41,44,45]. Although there are several advantages to using peat for energy production, such as energy security, diversification, and decentralization, there are rising concerns about the environmental impact of burning peat. Emissions released from peat combustion are equal to those of fossil fuels. The EU’s target is to phase out peat from energy use across the EU by 2050 to ensure the set climate and energy targets. Therefore, in recent years, substantial changes have taken place in the energy peat sector. Following the EU legislation, governments are promoting the generation of energy through renewable sources. This has increased from alternative energy sources such as solar, wind, and biogas and a substantial decrease in the use of peat.

In 2019, the share of peat production for energy use was highest in Finland, reaching 90%, and in Ireland, reaching around 75% of the total peat production (Figure 7a). Estonia and Sweden use around 40% of peat for energy production; however, peat extraction is almost entirely for agricultural use in Lithuania and Latvia, and peat share in total energy production is negligible. The total extraction area for fuel peat in the EU was recently found to be 1750 km² (0.34% of the total peatland area). Most of the peat for energy is consumed where it is extracted; therefore, the international trade of energy peat almost does not exist [4].

The total production of fuel peat in energy peat EU countries (FI, IE, EE, SE, LT, LV, and RO) was 1370 ktoe in 2021, resulting in a total of 16 TWh energy. The largest producers and consumers of energy peat within EU27 are Finland, Ireland, and to a lesser extent, Sweden. The production of energy peat has decreased considerably in the last few years (Figure 7b). A total decrease of 42% can be observed in 2021 compared to 2018. The observed decrease is a result of the governmental policies to significantly reduce the use of peat for energy purposes in the two largest energy peat countries, Finland and Ireland, accounting for 92% of the total energy peat production in the EU, as shown in Figure 7b. In Finland and Ireland, 913 kt and 349 kt of peat were extracted for energy purposes in 2021, respectively.

The decrease in energy peat production in Finland and Ireland in 2021 was 38 and 43%, respectively, compared to the 2018 level. An even larger decrease of 67% can be observed in Sweden in 2021, even if the total amount of energy peat consumed is much smaller. In other European countries, such as Estonia, Lithuania, and Latvia, the use of peat energy has also decreased considerably and is negligible (Figure 8). Romania is the only country where the use of energy peat has increased in recent years; however, the amount is very small.

Being the largest energy peat user, Finland generated 16 TWh of energy from peat on average per year from 2012 to 2019. Energy peat was used in 260 boilers in Finland, which produced district heat and heat for industry, as well as electricity for cogeneration [46]. The share of peat in the energy mix in Finland has been steadily declining. Peat use as a fuel is planned to be cut by 50% by 2030 [4], with the phase-out of the industrial use of energy peat to following shortly after [44]. One tool for the implementation of such measures was the increase in energy tax on peat, which almost doubled in 2019 [24]. In recent years, energy from peat combustion has accounted for less than 4% of the total annual energy consumption; however, it is responsible for more than 10% of the country’s annual GHG emissions [47]. Energy peat use decreased by 14% in 2021 compared to 2020, contributing 3% to the total energy consumption [47].

Ireland is the second-largest producer and consumer of energy peat in the EU. In 2015, Ireland’s Ministry for Energy announced the beginning of the phase-out of the harvesting of peat to produce heat and electricity by 2030. Already in 2020, Ireland withdrew peat from the electricity generation process and transitioned to alternative fuel sources [48]. As a result of the shutdown of two peat-fired power plants, the overall CO₂ emissions from electricity generation fell by 7% [49]. Peat briquette production has been decreasing since the early 1990s. In 2021, 2% of the total Irelands energy was produced from peat [48]. According to Ireland’s major peat extraction company, Bord na Móna, 55 ktoe peat briquettes were still produced in 2021 [48]. Peat is still used in the residential sector in Ireland. Both sod peat and peat briquettes are used for heating households [50]. It is expected that the use of peat for energy purposes will continue to decrease in the EU in the coming years due to political strategies adopted by member countries in accordance with the EU’s climate neutrality targets.

Overall, market analysis shows a significant decline in energy peat consumption, with ongoing replacement by biomass in energy production. The shift to alternative bioenergy sources at the national level is driven by emission allowances for peat burning, whereas wood biomass is deemed emission-free. In Finland, peat has been replaced by wood biomass, including wood chips, sawdust, forest residues, and bark. This decline is expected to continue. The reduction in peat use, alongside coal withdrawal, affects energy supply security, positioning wood biomass as the primary fuel option [46].

Studies have been focusing on renewable materials from agricultural, industrial, and municipal waste streams [51]. Some of the main alternatives are wood chips or bark, green compost, and coir pith [52,53,54]. Moreover, the proportion of peat in peat-containing growing media has also decreased. However, phasing out peat in the horticulture field faces some important challenges. Resource availability to produce alternative growing media constituents is one of the major concerns of the growing media industry [36].

Peat-free alternatives like coir, often sourced internationally, face potential supply shortages and disruptions due to global factors. Environmental impacts from shipping and varying production costs of alternative growing media also raise concerns. Despite these issues, the peat remains economically more favorable than its alternatives [55]. Further research on alternative materials to produce growing media is needed, including prices, sustainability, and security assessment, to move towards peat-free growing media.

5. Challenges and Opportunities in Peatland Restoration

Restoring peatlands has emerged as a priority, with the potential to deliver significant environmental, economic, and social benefits. However, the restoration of peatlands is a complex and multifaceted process. It requires balancing the ecological needs of the land with economic considerations, societal impacts, and scientific uncertainties. The strategies for restoration, such as rewetting, revegetation, and after-use management (including land conversion for agricultural or forestry purposes), all come with challenges and opportunities. This chapter explores the key restoration strategies for peatlands, highlighting the most promising opportunities and addressing the major challenges faced in peatland restoration efforts.

5.1. Key Challenges in Peatland Restoration

Despite the clear benefits of peatland restoration, several challenges remain. From scientific uncertainties about emissions fluxes to socioeconomic barriers, restoring peatlands requires overcoming numerous obstacles. The management of the ecosystem, the procedures for monitoring and reporting, the need for an adequate database, and the implementation of policies are potential major obstacles to peatland restoration.

One significant challenge is the monitoring of ecosystem services. These services must be evaluated against baselines to assess restoration progress. However, large-scale restoration efforts often make ground-based measurements impractical, necessitating the development of affordable techniques such as remote sensing technologies that link vegetation growth and greenhouse gas fluxes. Long-term ecosystem function monitoring is costly, and existing methods often lack standardization, complicating comprehensive assessments of restoration effectiveness. Moreover, inaccurate reporting of greenhouse gas emissions, especially from organic soils, remains a significant problem [7,56]. Many nations struggle to report organic soil emissions accurately, leading to uncertainties in national GHG inventories [57]. This reporting gap is particularly critical given the vulnerability of peatlands as carbon sinks. Drainage, extraction, and warming-induced changes in hydrology can accelerate carbon losses from peat soils, undermining their long-term storage function. Without urgent mitigation efforts, such as rewetting, improved monitoring, and policy integration, the balance and resilience of these ecosystems remain at risk. Enhancing the stability of peatland carbon sinks is not only essential for ecosystem integrity but also plays a pivotal role in achieving regional and global climate mitigation targets.

Another critical challenge is policy integration across several sectors. Effective implementation requires coordination amongst multiple stakeholders, including environmental authorities, agriculture, forestry, and water management. While increasing awareness of peatland restoration is a priority, effective implementation remains hindered by the lack of coordination across sectors. Restoration efforts require collaboration between environmental authorities, agriculture, forestry, and water management agencies. Without this coordination, national peatland restoration policies face substantial barriers to success. Additionally, in some regions with significant land-use pressures, such as the Netherlands, restoration opportunities are limited due to dense populations and intensive agriculture, while areas with lower land pressures, such as Central and Eastern Europe, offer greater restoration potential [25,58,59].

Another barrier to successful peatland restoration is policy coordination. Restoration efforts often require the involvement of multiple stakeholders, including environmental authorities, agriculture, forestry, and water management agencies. In some countries, a lack of coordination between these sectors has delayed or hampered restoration projects. This is particularly problematic in regions with intensive agricultural practices, where land use priorities often conflict with the goals of restoration [10].

The key to effective restoration lies in addressing these challenges through coordinated efforts, site-specific approaches, and innovative solutions to balance the ecological benefits with the economic realities of the affected communities.

5.2. Restoration Strategies and Opportunities

Peatland restoration is crucial for addressing pressing environmental challenges such as carbon sequestration, climate change mitigation, and biodiversity preservation. Peatlands store substantial amounts of carbon, which is released into the atmosphere when these ecosystems are damaged, contributing to climate change. Therefore, restoring peatlands not only mitigates carbon emissions but also aids in revitalizing biodiversity and supporting ecosystem services [60].

Restoration strategies generally focus on improving the hydrological conditions of degraded peatlands, with rewetting being one of the most effective methods. Rewetting involves raising the water table to restore natural hydrological conditions, thereby reducing carbon emissions and allowing peatlands to regain their role as carbon sinks. This is especially important for drained peatlands, which are major sources of GHG emissions. However, rewetting requires careful management to prevent CH₄ emissions, which can increase in the short term due to changes in water levels and microbial activity in rewetted soils.

Figure 9 illustrates how carbon dynamics in peatlands depend on the balance between photosynthesis and respiration. The efficiency of carbon capture through photosynthesis is influenced by several factors, including the photosynthetically active radiation (PAR), the vegetation cover (Leaf Area Index, LAI), the length of the growing season, the temperature, and the optimal groundwater levels. Fluctuations in these factors can significantly affect the ability of peatlands to sequester carbon. Additionally, methane (CH₄) and nitrous oxide (N₂O) emissions are linked to water levels, nutrient availability, and the type of vegetation, highlighting the complexity of managing carbon dynamics in peatland ecosystems [60].

Restoring peatlands through renaturalization—or rewetting—is a priority in many restoration projects. Rewetting helps to re-establish hydrological conditions, which are vital for carbon sequestration and biodiversity. Ideally, the water table should remain 20–30 cm below the surface year-round to maintain optimal conditions for peatland ecosystems to thrive [61]. Technological interventions, such as drainage blocks, can help retain water in formerly drained peatlands, gradually raising the groundwater levels and restoring natural conditions.

Afforestation is another potential after-use for degraded peatlands. Forestry can sequester carbon and restore biodiversity, but its long-term climate benefits are still uncertain. While tree planting enhances carbon sequestration, there are concerns that the carbon loss from the original peat might not be fully compensated by forest growth, especially when considering the long-term carbon dynamics of the peat itself [62].

Other land uses, such as croplands, blueberry, and cranberry farming or perennial grasslands, offer both economic opportunities and climate change mitigation. However, these activities often generate higher GHG emissions than wetland restoration. In particular, converting drained peatlands to croplands can result in high CO₂ emissions, making it a less viable option for climate mitigation compared to rewetting [63].

Paludiculture—the practice of cultivating wetland plants on rewetted peatlands—has also been recognized as a promising alternative. Plants such as reeds, cattails, and Sphagnum mosses can be cultivated in periodically flooded peat soils, offering both biodiversity value and carbon sequestration potential. In addition, paludicultures can provide renewable biomass for energy production, offering an alternative to fossil fuels. This practice helps maintain peatland hydrology, reducing peat oxidation and further enhancing carbon capture [64].

However, emissions from rewetted peatlands remain uncertain, particularly concerning methane (CH₄) and nitrous oxide (N₂O) emissions. While methane emissions may increase for up to 30 years after rewetting, the growth of diverse vegetation can help mitigate these effects. Similarly, nitrous oxide emissions are highly variable and are influenced by factors such as land use and location effects [65,66]. Rewetting is not always suitable for all peatlands, as its effectiveness depends on site-specific conditions. In some cases, rewetting could lead to short-term negative impacts, such as water quality degradation or reduced agricultural viability due to elevated water levels [7,67]. Therefore, careful site assessment is crucial before implementing rewetting.

The sustainable development of European peatlands requires an integrated framework that reconciles ecological restoration with socioeconomic demands. As peat remains a key input in the horticultural and agricultural sectors, particularly as a high-quality substrate, transitioning toward environmentally responsible alternatives is imperative. Approaches such as paludiculture present viable options for productive land use on rewetted peatlands, offering climate mitigation benefits through carbon sequestration while supporting biodiversity and rural economies. Effective peatland management should be grounded in climate-resilient policies, the promotion of peat-free growing media, and support for multifunctional land use that aligns with conservation goals. In this context, the integration of ecological, economic, and policy instruments is essential to ensure that peatland use contributes to the European Union’s broader objectives for climate neutrality, biodiversity protection, and sustainable agricultural development [68,69].

5.3. Systems Approach to Peatland Management

The restoration and sustainable management of peatlands require a multifaceted approach, as these ecosystems are shaped by a complex interplay of ecological, socioeconomic, and policy-driven factors. A system-thinking perspective is essential for understanding how different variables interact between peatland degradation, climate change, governance, and socioeconomic factors. The causal loop diagram shown in Figure 10 illustrates the interconnected feedback mechanisms that influence peatland ecosystems, offering a comprehensive perspective on how various environmental, socioeconomic, and policy-related factors interact in shaping the better peatland ecosystem. Two opposing feedback loops drive the fate of peatlands:

• A reinforcing loop (“R”) that accelerates peatland degradation and climate change.
• A balancing loop (“B”) that attempts to counteract these effects through governance, restoration, and sustainable management.

Peatland degradation is primarily driven by economic incentives, leading to extensive land use changes, such as drainage for agriculture, forestry, and peat extraction. These activities set off a reinforcing feedback loop (“R”) where degraded peatlands, once strong carbon sinks, become major sources of GHG emissions. As emissions rise, climate change intensifies, triggering more extreme weather events, droughts, and wildfires, which further degrade peatlands. The feedback loop underscores the urgency of intervention as even though peatlands occupy only a small fraction of the earth’s surface, they contribute disproportionately to global carbon emissions when degraded.

However, the balancing loop (“B”) represents the possibility of breaking free from this pattern through peatland restoration, governance, and community-driven conservation efforts. Peatland restoration plays a dual role: not only does it rebuild ecosystems and biodiversity but it also strengthens carbon sequestration, counteracting emissions. Yet, restoration is only successful when supported by strong governance, policy integration, and local engagement, factors that are often overlooked in conventional peatland studies.

This system-thinking approach presents a novel way to analyze the interconnected dynamics of peatland management. Many of the existing studies focus on individual aspects of degradation such as carbon loss, biodiversity impacts, and climate change. This review offers an integrated approach by linking environmental consequences, socioeconomic drivers, and governance efforts. By emphasizing how governance, economic forces, and ecological restoration interact, this work fills a critical gap in current knowledge and offers a comprehensive view of climate resilience.

6. Conclusions

This paper emphasizes the critical importance of sustainable peatland management for climate change mitigation and ecosystem service preservation. It highlights the significant negative impacts of peat extraction, including carbon dioxide emissions, and details the European Union’s comprehensive policy response. These policies aim to protect, restore, and sustainably manage peatlands, considering the varied European contexts and advocating for a phased, location-specific approach to meet restoration objectives. Additionally, the need for decision-support tools for selecting sustainable management techniques based on geographical specifics is underlined.

The review provides a detailed analysis of peatland management within European environmental policy frameworks, highlighting the essential role of peatlands in ecological balance and the need for concerted sustainable management and restoration efforts. It calls for ongoing research, innovation, and collaboration to address peatland degradation and underscores the EU’s commitment to ecological sustainability and climate mitigation, advocating for the potential of peatlands as vital natural resources. Moreover, it has shown that the complexity of variables influencing carbon dynamics within the peatlands underscores the necessity for a specialized assessment tool that guides the selection of the most appropriate restoration strategy, balancing ecological, hydrological, and socioeconomic factors. This comprehensive and multidisciplinary approach ensures the sustainability and efficacy of restoration efforts, aiming to maximize environmental benefits while considering the broader impact on local communities and economies. To ensure the long-term sustainability of the peatland ecosystems, we emphasize the following key recommendations: enhanced monitoring and decision-support tools; stronger policy integration and enforcement; targeted financial support for restoration; investment in sustainable alternatives; and stakeholder engagement and public awareness.

In light of these findings, it is evident that the future of European peatlands will depend on how effectively ecological restoration is integrated with economic and policy frameworks. Beyond restoration, there is a need to reimagine peatlands as multifunctional landscapes that can simultaneously deliver climate mitigation, biodiversity conservation, and socioeconomic benefits. Moving forward, a transformative shift is required—from reactive protection to proactive ecosystem design—where sustainable land use, paludiculture, and circular bioeconomy models are prioritized. As such, peatlands should no longer be viewed as extractive resources but as climate assets and innovation platforms. Bridging the gap between science, policy, and practice will be crucial, and this review aims to serve as a foundation for more integrated, adaptive, and forward-thinking peatland strategies across Europe.