Funding for Water- and Climate Projects 2024 and 2025
Funding for Water- and Climate Projects 2024 and 2025 is a funding scheme for projects concerning the rewetting of drained peatlands for municipalities and local departments of the Danish Nature Agency. It is administered by the Danish Agricultural Agency. The water and climate projects are a part of the Danish CAP-plan 2023–2027 and are primarily financed through the EU via the European Agricultural Fund for Rural Development (EAFRD). The funding scheme supports four types of measures:
Nitrogen wetland projects
Nitrogen wetland projects are often constructed near the coast. The main aim of these wetlands is to reduce nitrogen emissions to fjords and coastal waters.
The total grant sum for Nitrogen wetland projects is around €25 million in 2024 and expected to be similar €25 million in 2025.
Nitrogen wetland projects are financed 80% through EAFRD and 20% through national funds from the Ministry of Food, Agriculture and Fisheries.
Lowland projects
The main aim of lowland projects is to reduce greenhouse gas emissions from soils with high carbon content. Lowland projects can also contribute to reducing emissions of nitrogen to coastal waters, and to enhance ecological conditions.
The total grant sum for Lowland projects is €6.7 million in 2024 and is expected to be € 33.5 million in 2025.
Nitrogen wetland projects are financed 100% through EAFRD.
The Environmental Protection Agency have developed methods to calculate the expected effects of lowland projects on nitrogen, phosphorous and CO2 emissions. The calculation sheets are available online on their website.
Phosphorous wetland projects
Phosphorous pollution is the main cause of eutrophication in Danish lakes, and phosphorous wetland projects aim at reducing phosphorous emissions to the freshwater environment.
The total grant sum for Phosphorous wetland projects is €1.9 million in 2024 and expected to be €1.7 million in 2025.
Phosphorous wetland projects are financed 80% through EAFRD and 20% through national funds from the Ministry of Food, Agriculture and Fisheries.
Projects about watershed restoration
Watershed restoration projects are large-scale projects meant to restore natural hydrology and enhance conditions for fulfilling environmental goals
The total grant sum for watershed restoration projects is €2.4 million in 2024 and expected to be similar € 2.4 million in 2025.
Watershed restoration projects are financed 80% through EAFRD and 20% through national funds from the Ministry of Food, Agriculture and Fisheries.
All projects go through a preliminary study before they are implemented, to examine the potential positive and negative effects of rewetting the specific area. Nitrogen wetland projects, lowland projects and phosphorous wetland projects can be very similar in their implementation, but they are separated in the application process. The Environmental Protection Agency states that the wetland measures implemented through Water and Climate projects can also contribute to flooding mitigation as they can hold more water.
Recipients of the funding scheme are compensated for all expenses related to the preliminary study and the project implementation, including technical surveys, consultant services, and materials. Landowners can choose to sell the land to the Agricultural Agency at an agreed price or to keep the land and receive economic compensation for loss of value (værditabskompensation), or economical one-off compensation (engangskompensation). In compensation for loss of value, landowners are compensated for any loss of value resulting from the extensification of land and its potential conversion to wetter conditions as part of a project. The Danish Agricultural Agency determines the loss of value for each area based on several conditions, calculating it individually for every plot included in the project zone. One-off compensation is another option for landowners choosing to keep the project land. The one-off compensation builds on pre-determined compensation rates, which vary depending on whether the land has been used for intensive or extensive agricultural production in the time up until the project period. For Water and Climate projects 2024–2025, the compensation is €11,060 per hectare for intensively cultivated agricultural land such as areas used for crop production, and €4,759 per hectare for nature areas and grassland, with or without grazing animals. Landowners are also able to request compensational land instead of economic compensation, meaning that the state supplies another land area that the landowner gains ownership of.
Economic compensation for the project is disbursed after the project has been carried out, and a final report is submitted together with a request for reimbursement of expenses. The project period is set to a maximum of four years for the project implementation, and a maximum of two years for the preliminary study.
Funding for Climate-lowland projects
Climate-lowland project funding support projects that take agricultural land out of production in carbon-rich wetlands to support CO2 reduction. They are also meant to support goals for nature, good water quality and climate adaptation. The overall policy about climate-lowland projects were subject to an environmental impact assessment from the Environmental Protection Agency before the decision of their implementation.
Grants can be given to municipalities, private landowners, national park foundations, and foundations that support nature, environment or climate. Moreover, the Nature Agency can carry out climate-lowland projects. All projects go through a preliminary study before they are implemented, to examine the potential positive and negative effects of rewetting the specific area. To qualify for grants in a specific project area, the area must meet the following criteria:
Soil composition: At least 60% of the project area must consist of organogenic soil with a minimum carbon content of 6%.
Size requirement: The total area must be at least 10 hectares.
The compensation for Climate-lowland projects is based on pre-determined compensation rates. The rates are the same as for Water and climate projects, so the funding schemes do not compete. This means that the compensation rates are €11,060 per hectare for intensively cultivated agricultural land such as areas used for crop production, and €4,759 per hectare for nature areas and grassland, with or without grazing animals. Just as for the Water and climate projects, compensation can be received after the project, when a final report is submitted.
The Environmental Protection Agency and the Agricultural Agency have developed a map tool with all land areas in Denmark, mapping the areas that are relevant for the funding schemes for Climate-lowland projects and Lowland projects. The map platform is publicly available for all at
www.udtagning.dk developed in cooperation with The Danish Environmental Portal.
Funding for Mini wetland projects
Private landowners can apply for funding for mini wetland projects through a specific pool of funding at the Ministry of Agriculture. The scheme is partially funded by the EU under the Danish CAP plan, with additional support for maintenance and area compensation from national funds from the Ministry of Food, Agriculture and Fisheries. In 2024, approximately € 18 million are available for mini wetland projects.
Mini wetlands are small, constructed wetlands which consist of components like sedimentation basins, deep basins, and shallow vegetated zones, which work together to filter sediments and remove nitrogen and phosphorus from water. The size requirement for the wetland depends on the drainage basin of the wetland and can therefore vary.
Many mini wetland projects may not be considered as rewetting as their placement is determined by nitrogen reduction capacity, and not by the placement of historical wetlands. It is a requirement from the funding scheme that projects are coordinated with larger rewetting projects.
Denmark’s Green Land-use Fund
The Green Land-use Fund, implemented through the Green Tripartite Agreement, is a dedicated financial resource aimed at accelerating land conversion in the Danish landscape, from productive agricultural land to nature areas or less intensive agriculture such as pasture. In terms of rewetting, the purpose of the fund is to strengthen the existing efforts and support the state's ability to strategically acquire agricultural land ahead of lowland projects. In this way, the state can also to a greater extent provide replacement land. This can help ensure that lowland projects can be implemented more quickly. The Green Land-use Fund will also support increased land consolidation, facilitated distribution processes where landowners can buy or exchange land areas. Through the land consolidation processes, the government and municipalities can also buy land from private landowners. It is however outlined in the Green Tripartite Agreement that it is not an ultimate goal for the Danish Government to own more land through the Green Land-use Fund, but that the fund is put in place to facilitate land re-distribution, strategic land acquisition and resale. Moreover, measures implemented through the Land-use Fund should not be more attractive than existing funding schemes (described above), or than selling land at market conditions.
Tax on CO2e emissions from agricultural soil
Through the Green Tripartite Agreement from 2024, the Danish government has decided to implement a tax on greenhouse gas emissions from low-lying carbon-rich soils. The aim of the tax is to provide incentives for landowners to enter rewetting projects through the above-mentioned funding schemes. Landowners that take part in these projects will therefore be exempted from paying the tax. The tax is based on calculations made in the Green tax reform proposal in 2024.
The proposed tax for greenhouse gas emissions from organogenic low-lying soils is €3.5/tons CO2e. The tax will be revisited by the parties behind the Green Tripartite Agreement in 2027, where there will be an evaluation of whether the tax should be increased to reach the goal of ceased production on 140,000 hectares of low-lying carbon-rich soils before 2030.
Details regarding the implementation of the tax are not in place as of November 2024 and will be decided on in forthcoming political agreements.
4.3 Rewetting policy evaluations and monitoring
In general, there are no large-scale monitoring efforts of the environmental and climate effects of rewetting policies in Denmark. The measures which are directed towards rewetting agricultural soils are followed up through monitoring of the rewetted area. There is currently no large-scale monitoring of the greenhouse gas emissions, nutrient load and ecological effects of these rewetting projects. There are a few pilot projects that have monitored or evaluated specific effects of rewetted areas through research projects.
Monitoring rewetting area-based goals
In Denmark, there are some overarching efforts to monitor the area-based goals of rewetting. Since the Agricultural Agreement in 2021, The Environmental Protection Agency, The Agricultural Agency and the Nature Agency have continuously followed up on their respective efforts to rewet peatland agricultural soils in Denmark. This is reported as the area (hectares) of lowland projects that are in the pre-investigation phase, under implementation, or finished. The reporting has so far been carried out approximately once per year. Results from the reporting are presented in Table 4.