LONDON: European Green Transition (EGT) has secured an option to develop a peatland restoration project at Altan farm in Donegal, Ireland. The project aims to generate carbon credits by restoring degraded peatland, which can significantly reduce greenhouse gas emissions.

This project follows Scotland’s lead in peatland restoration, with EGT hoping to replicate successful projects there. The company sees potential for further development of similar projects across Europe.

Peatlands store vast amounts of carbon, and restoring them can be a valuable tool in mitigating climate change. EGT’s project could help businesses meet carbon neutral goals by providing carbon credits.

As energy demands of businesses grow globally, there is an increased scrutiny on the environmental footprint of each business, particularly its emissions. Policymakers have implemented challenging targets for businesses to progress towards carbon neutral goals in the coming years.  Therefore, large organisations actively buy carbon credits to absorb their emissions or to claim a contribution to societal climate targets. The Taskforce on Scaling Voluntary Carbon Markets, sponsored by the Institute of International Finance with knowledge support from McKinsey, estimates that demand for voluntary carbon credits could increase by a factor of 15 or more by 2030, with a value upwards of $50 billion, and by a factor of up to 100 by 2050.

A carbon credit is generated by either removing from the atmosphere, or avoiding the emission of one tonne of carbon dioxide equivalent. Carbon credits can be sold through a large number of organisations and carbon markets exist as mandatory (compliance) schemes or voluntary programs. Peatlands have immense carbon market potential as restoration can substantially reduce emissions and ultimately sequester carbon. As a result, EGT sees significant opportunity to generate carbon credits from Altan and scale the Carbon Credit Project across other peatland opportunities.

Peatlands are vital ecosystems in the fight against climate change, covering just 3% of the world’s surface yet holding nearly 30% of all natural carbon – almost twice as much as the entirety of Earth’s forest biomass. Peatlands are characterised by permanently waterlogged conditions that prevent plant material from fully decomposing, keeping carbon locked in and preventing it from entering the atmosphere as greenhouse gas.

Peatlands continue to be degraded around the world. About 12% of the world’s peatlands have been drained for agricultural and forestry use with degraded peatlands accounting for 4% of global annual emissions.  The European Union has experienced the largest losses, with over 50% of former peatland areas no longer accumulating peat. Peatlands cover 1.5 million hectares in Ireland and approximately 30% have been degraded through activities such as draining and agricultural practices.

Drained and degraded peatlands currently emit around twice as much greenhouse gas as the aviation industry. This is a result of the peat soil becoming exposed to air, which accelerates the decomposition of its organic matter, releasing stored carbon as CO2 into the atmosphere. Restoring European peatlands would prevent roughly the same amount of annual emissions as taking 84 million passenger vehicles off the roads. Peatlands also naturally sequester carbon by absorbing it through plants and storing it in the ground (provided the water table is kept persistently high), making them a valuable tool in plans in climate mitigation plans.

Jack Kelly, Chief Financial Officer of European Green Transition, said: “The Altan Option agreement offers EGT the opportunity to generate cash flow in a capital light manner by generating carbon credits. The market for voluntary carbon credits is projected to grow by a factor of 15 or more by 2030 as companies progress towards carbon-neutrality goals, and this agreement offers us an entry point into this high-growth market. Other European countries, particularly Scotland, already have a thriving carbon credit industry, generating credits from peatland sinks.

“Peatland covers 1.5 million hectares of land in Ireland, however most of our blanket bog habitats are in poor condition due to human activity and, as a result, are not functioning as they should. Rather than absorbing carbon from the atmosphere, they are leaking carbon back into the environment, which had previously been stored in the peat for thousands of years. The UN has estimated that Ireland’s degraded peatlands emit 21.5 million tonnes of CO2 equivalent per year, and Ireland has recently been referred to the Court of Justice of the European Union for failure to protect its peat bogs. We see this Option as not only developing our prospective carbon credit revenue stream, but also potentially contributing positively to Ireland’s climate goals.

“The Altan carbon credit generation project has the potential to be one of Ireland’s first peatland carbon sink projects, and could also be the first step in a business model of both generating and trading carbon credits that could be scaled up in the years and months ahead.”

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