Compensation agreement for forestry landowners
In 2024, the Forest Agency received €6.95 million to compensate landowners for rewetting drained forestry peatlands. The Forest Agency handles all preparations, planning, and implementation of wetland restoration. The programme involves a 50-year agreement between the Forest Agency and the landowner, primarily aimed at reducing greenhouse gas emissions. The agreement outlines how rewetting should be carried out on the designated land.
Compensation is based on the estimated economic loss from reduced tree growth, averaging 25% of normal forestry practices. Rewetting also affects the land’s bearing capacity, limiting clear-cutting activities. Landowners receive compensation equivalent to 35% of the land's estimated value, with higher payments for more fertile soils due to their greater potential for net greenhouse gas emission reductions. As a result, southern Sweden, with its more fertile soils, is prioritised for these cost-efficient initiatives. Landowners do not receive compensation for timber on the land, as the agreement allows them to retain ownership and the right to fell timber throughout the contract period. The maximum compensation per hectare of land is currently €2,780.
LONA Wetlands
The Agency for Marine and Water Management distributes funds to Swedish regions (länsstyrelserna), which are responsible for local rewetting projects through the LONA-wetlands funding scheme (Lokala naturvårdssatsningen). Only municipalities can apply for this funding, with grants covering up to 90% of eligible costs. In 2024, €8.08 million was allocated to the regions for these initiatives.
Action Programme for Protected Areas
The EPA is responsible for wetland restoration within protected areas, including nature reserves and national parks, as part of the Action Programme for Protected Areas. These areas contain habitats of exceptionally high natural value. In 2024, the EPA received €11.3 million to fund hydrological restoration efforts, with a primary focus on peat-rich bogs spanning extensive areas.
Funding schemes for rewetting with hydrological and biological objectives
As outlined in national policies, there is also funding available with a broader focus on wetland restoration, which includes rewetting but has more focus on the restoration of pristine landscapes and therefore not focus on climate change mitigation. This funding targets other types of land, with the primary objectives of improving hydrological conditions, enhancing biodiversity, or reducing eutrophication. It is financed through a combination of government funding, private contributions from NGOs, and EU programmes such as LIFE and the CAP.
The Swedish Board of Agriculture allocates funds from the CAP to farmers for the re-establishment and restoration of wetlands. The primary aim of these investments is to reduce the transport of nitrogen and phosphorus from agricultural land into lakes, seas, and other water habitats. Farmers in Sweden have been receiving EU funding under the CAP programme since the country joined the European Union in 1995.
In 2023, for the first time, funds were allocated to the National Property Board (€0.35 million) and the Swedish Fortifications Agency (€0.09 million) to implement rewetting initiatives on state-owned land. The objectives are to strengthen biodiversity and ecosystem services, reduce greenhouse gas emissions, decrease eutrophication, and improve groundwater infiltration.
Swedish regions are responsible for funding schemes for local rewetting projects, through LOVA (Lokala vattenvårdsprojekt) and LONA. Municipalities and local CSOs can apply for funding for restoration and construction of wetlands. Projects include closing ditches, restoring water habitats and swamp forests, and preparatory work for wetland restoration or construction. Under LOVA (specifically for wetlands), 80% of eligible costs are covered. However, neither LONA nor LOVA can compensate landowners for any lost economic profit on the converted land. The Swedish Society for Nature Conservation provides a 10% top-up on the 90% funding from LONA-wetlands. This allows landowners to receive grants covering 100% of construction costs for rewetting and restoration projects.
Municipalities, companies, CSOs, and public agencies can apply for rewetting funding through EU-LIFE, financed directly by the EU Commission. The programme primarily aims to restore and protect biodiversity. LIFE co-financing covers up to 60%, depending on the applicant type, and supports rewetting on both agricultural and forest land. The Swedish EPA provides guidance during the application process.
Conflicts with other national objectives
In an interview with Swedish EPA, the multifunctional purposes of wetlands were raised with uncertainty, as rewetting is highly prioritised for climate change mitigation efforts in Sweden. In the interview it was expressed that rewetting initiatives on different land types have varying effects on the environment and carbon sequestration. Prioritising only the most climate-efficient outcomes, such as peatlands with high organic matter content, risks underprioritizing other wetlands, like nutrient-poor soils in the north, which support unique biodiversity. This could potentially negatively impact red-listed species and habitats. The EPA emphasises the importance of considering both climate and environmental perspectives when prioritising rewetting initiatives to ensure a balanced mix of outcomes.
Nutrient-rich peatlands, mainly in southern Sweden, are used for agriculture, while nutrient-poor peatlands in the north (mineral soils) support unique biodiversity and are used for forestry. According to the EPA, compensating farmers for rewetting agricultural land is more costly because the land is valuable for food production and has higher nutrient content due to cultivation. Before rewetting, nutrients may need to be removed to prevent eutrophication in nearby land and water bodies. While rewetting in most cases are beneficial for both climate and the environment, the EPA highlights a risk of the government focusing too narrowly on uniform rewetting for climate purposes.
Rewetting forestry land can conflict with timber production, a key industry for Sweden and a major export sector, as it significantly slows tree growth on drained peatlands. However, according to the Forest Agency, this has not yet been a major issue (as of November 2024) since rewetting efforts have primarily targeted non-productive forestry land. To accelerate CO₂ emission reductions, richer peatlands may increasingly be targeted for rewetting, potentially conflicting with timber production. A researcher from Stockholm University, part of the sounding board, highlighted this issue, noting the lack of political focus on forest restoration and protection. Instead, priority is given to the economic importance of the forest industry as a key export sector, which negatively impacts investments and prioritisation of rewetting forestry-drained peatlands.
8.3 Rewetting policy evaluations and monitoring
Rewetting for climate purposes in Sweden has only been a political priority since the early 2020s, so evaluations and monitoring of these policies remain limited. However, a few notable surveys and evaluations, as presented in the following sections, have been conducted, with some ongoing efforts assessing rewetting policies on both agricultural and forestry land.
Peat-map to guide rewetting initiatives
In December 2023, the Swedish EPA, in collaboration with the Board of Agriculture and the Forest Agency, completed a mapping of the most suitable geographical areas for rewetting on drained peatlands. The Forest Agency manages the “peat-map,” which helps landowners determine if their land is suitable for rewetting.
Compensation agreement forestry landowners
A 2024 survey by the Swedish EPA explores forest landowners' attitudes toward rewetting since financial compensation and agreements were introduced in 2020. The key finding for the survey is that landowners primarily are motivated by environmental benefits, such as improved biodiversity and ecosystems, rather than the climate impact of rewetting. This is likely because biodiversity and ecosystem effects are more tangible and visible, while climate benefits are more abstract. This insight will likely influence communication and advisory efforts, particularly by the Forest Agency and the Board of Agriculture, when engaging with landowners about rewetting.
A recent evaluation of compensation agreements for forest landowners examines the main drivers and barriers for committing to rewetting agreements. The study also found that biodiversity benefits are the primary incentive, while climate effects are seen as secondary. Economic compensation was considered less important, though forest owners noted that higher compensation could encourage more participation, as current levels do not fully cover their costs. A notable barrier is the historical perception of rewetting, as older generations worked hard to drain the land, and some landowners view rewetting as undoing that effort. Additionally, many landowners feel there is a lack of knowledge about rewetting and its long-term impact on their land. While those who had direct contact with the Forest Agency reported positive dialogues, uncertainties remain regarding the economic and ecological effects over time. This report is part of a larger assessment of rewetting agreements, which will be completed and available in early 2025.
Additional insights on the experiences from current rewetting agreements were shared by a Forest Agency policy expert during an interview for this study. Since rewetting became a priority in Sweden's climate strategy, the government expects rapid reductions in CO₂ emissions. However, many landowners remain unaware of rewetting, its effects, eligibility for compensation, and what the agreements cover, leading to a slow start. The Forest Agency representative highlighted the need for extensive efforts to inform landowners about available compensation and educate them on the benefits for climate and biodiversity. To accelerate rewetting agreements, the agency emphasises the need for greater awareness among landowners and additional resources to engage directly with landowners.
The Forest Agency states that the compensation value for landowners has not yet been evaluated. Assessing whether it is appropriately priced or if adjustments in compensation levels could improve efficiency would be useful. The Agency states that further analysis is needed to determine if the current level is optimal from a socio-economic perspective. According to the EPA survey on landowners' attitudes toward rewetting, the current compensation level does not appear to be the primary motivator for rewetting. Instead, the positive effects on biodiversity and ecosystems are the main drivers. However, it is still mentioned by the landowners that higher compensation could potentially incentivise landowners less focused on environmental benefits to engage in rewetting. Nevertheless, there is not enough understanding today of to what extent the compensation level aligns with landowners' perceptions of their land's value when rewetted.
Legal barriers to rewetting initiatives
In 2024, the government tasked the Swedish EPA, in collaboration with the Swedish Agency for Marine and Water Management and the Swedish Board of Agriculture, to review legislation that may hinder rewetting initiatives. The agencies will assess the need for changes to soil drainage regulations to facilitate wetland restoration where no conflicting interests, such as productive agricultural or forestry land, exist. The investigation will analyse laws related to land and property ownership, identifying obstacles such as outdated drainage regulations and overly complex contracts. Many contracts are so old that finding the original landowners is difficult, and larger rewetting projects often involve multiple landowners. To make rewetting initiatives more efficient and ensure their intended climate benefits, regulations for water operations and land drainage must be updated. The results from the investigation will be finalised in 2025.
Basis for rewetting wetlands – analysis from the EPA to the government
In a report to the government published by the Swedish EPA in 2023, rewetting and its climate potential are evaluated in relation to the support mechanisms implemented. The rewetting potential of 100,000 hectares of forest land and 10,000 hectares of agricultural land, identified in the 2020 government assessment, was re-evaluated in light of the new available funding. The 2020 report's suggestions remain valid as effective measures to support the goal of climate neutrality by 2045. However, the report highlights that counselling efforts are crucial for achieving rewetting objectives on time. Improved local support and direct dialogue with landowners are essential to raise awareness of support mechanisms and enhance knowledge about rewetting and its effects. The EPA recommends prioritising these efforts to accelerate progress. This conclusion is echoed by the Forest Agency, which notes that insufficient resources have been allocated to these activities, despite their importance in speeding up rewetting. It is furthermore recommended by the Swedish Board of Agriculture to implement previously suggested measures to restore 10,000 hectares of agricultural land into wetlands, as this is the most effective method for significantly reducing CO₂ emissions from agricultural land. Consequently, the compensation scheme should be adapted to also include drained agricultural land. Emission reduction calculations show a decrease of 1 to 9 tonnes of CO₂e per hectare per year for forest land and approximately 21 tonnes per hectare per year for agricultural land on organic peatlands. These figures represent net reductions, factoring in the initial rise in methane emissions after rewetting, which diminishes over time.
Reporting on area and emissions reductions from rewetting initiatives
The Swedish University of Agricultural Sciences has analysed the effects of rewetting activities under several national programmes, including LONA (LONA wetlands), LOVA, The Forest Agency´s compensation agreement to forestry landowners, the Rural Development Program, the Action program for protected species, the Action program for valuable nature, and other forms of funding support. The report was commissioned by the Swedish EPA and published in 2024. It states that in 2023, 2,100 hectares of drained wetlands were rewetted through the government budget initiative, including 1,500 hectares of peatlands, covering a total of 588 projects. These efforts were estimated to have reduced emissions by 6.1 kt CO₂eq. Table 15 shows an overview of the total rewetted area supported by the national programs in the years 2021-2023.