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Carbon Ratings

Project Type Insight - Peatlands: Critical to unlocking the UK’s net zero progress and economic future

June 3, 2024

Overall, the world spends less than half the amount of funding needed by 2025 on nature-based solutions and only one-third of the 2030 requirement. And the funding gap is having detrimental effects. In the UK alone, the Green Finance Institute found that damage to the natural environment is slowing the economy and could lead to an estimated 12% reduction in GDP in the years ahead, a more significant impact than the global financial crisis or COVID-19. 

To help combat this, Sylvera has pioneered leading techniques to improve the measurement of carbon stored in different sinks worldwide and bringing it to scale with software to bring more confidence. With the help of funding from Innovate UK and private and public partnerships, like CEH and Nattergal, we’re working to improve carbon measurement in the UK’s peatlands.

With better measurement of carbon at its source, we can increase confidence in investment into natural resources like peatlands, via the carbon markets or other tools; and understand much more precisely what time we do or don’t have for climate change targets. Peatlands are one of the region’s largest carbon sinks, but they’re only effective when they’re healthy. At least 80% of the UK's peatland habitats have been lost or damaged. Restoring and protecting them could be critical for the UK’s net zero progress– and overall economic future. 

The challenge in measuring peatlands’ carbon

Despite the opportunity and importance, assessing the true value and impact of peatland restoration projects is challenging due to significant data gaps. First, the nascency of the peatland carbon credit market creates uncertainty about credit quality, leading to investment hesitance. Second, while small-scale research on peatland carbon sequestration is well-established, project-level data is lacking. Current carbon accounting relies on assumptions from inefficient manual sampling; there is a crucial need for more accurate methods. Finally, there is a lack of comprehensive peatland mapping in the UK and globally.

Addressing the need for better data transparency is crucial to validate the benefits of peatland restoration and ensure its credibility. We want to rate carbon credits from these projects in order to help shore up investor confidence and support the growth and success of global, high-quality peatland restoration efforts, but at the moment, that’s not yet possible. That’s, in part, why we decided to invest in improving the measurement ourselves. 

In time, this research will enable Sylvera to produce the most detailed and robust Ratings for peatland restoration projects. Our research has brought together industry partners, customers, and peatland restoration developers, including: 

  • AirFriendly, a UK-based carbon credits solutions provider
  • Ridge Carbon Capture, a nature-based carbon capture developer and investor
  • Nattergal, a project developer for rewilding sites, restoring a UK peatland site known as High Fen
  • The Peatland Code, the registry for all UK peatland restoration projects and developer of the peatland restoration methodology 

Even though different peatland restoration projects achieve the same certification, there are huge discrepancies between the additionality, permanence and co-benefits of them. Therefore, it is vital that third-party experts can help buyers understand project quality. At Nattergal, we believe nature comes first and put huge emphasis on restoring peatlands to safeguard their unique biodiversity, in addition to the carbon they store. The market can only support and reward our commitment to nature recovery if participants are aware of the lengths we go to effectively prioritise the ecology of the sites we manage. – Matthew Hay, Natural Capital Manager at Nattergal 

Three key takeaways

While there is not yet sufficient data to produce Ratings, in this Peatlands Project Type Insight we wanted to share our learnings about the project type and how to assess their quality. From our research we found: 

  1. The high potential of peatland restoration projects: When properly restored, peatlands hold incredible potential to act as significant carbon sinks. This restoration stores carbon and provides inherent benefits to the ecosystem, offering a much-needed win for both climate and biodiversity.
  2. Policy support and its impacts on financial transparency: In the UK, current policy efforts support peatland restoration, which could impact the additionality of these carbon projects. However, these policies cover only a portion of peatlands’ high-cost activities per hectare, meaning carbon credits could be effective tools for filling critical funding gaps. 
  3. Advancements needed in carbon measurement: Digital MRV (Measurement, Reporting, and Verification) is common for aboveground biomass, but peatland restoration projects need enhanced Digital MRV for more accurate carbon accounting. 

What’s next: further research to increase confidence 

In the next phase of our research, we’re building models to estimate peat extent and depth in the UK using satellite imagery. This will refine the carbon accounting of peatland restoration projects, strengthening their investment prospects. In addition, we’re working on mapping water table depth for direct emission calculations, with model calibration supported by soil coring and drone-derived field data. This ongoing research will enhance confidence and transparency for investing in peatland credits, improve carbon accounting through our MRV technologies, and provide more data to increase widespread understanding of these crucial carbon storage areas. As we continue to refine these techniques and data, we’ll eventually be able to issue Ratings.

Better data will create more certainty, meaning registries, developers and investors can all help drive urgently needed funding to these effective climate solutions. Beyond the carbon markets though, in time, our data and techniques will enable direct emissions monitoring and reduction from restored and drained peatlands, from national parks to NGOs. 

Download our Project Type Insight to learn more about peatland restoration projects, how we would approach rating them, and what attributes they need to maximize climate impact.
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This article features expertise and contributions from many specialists in their respective fields employed across our organization.