Decoupled payments for drained peatlands should be phased out completely in the next EU Common Agriculture Policy (CAP) the European Scientific Advisory Board on Climate Change (ESABCC) has recommended.

The report on climate adaptation and mitigation in the agri-food system and recommendations for coherent EU policies by the board was recently presented by Teagasc to the Climate Change Advisory Council in Ireland.

It also recommends that peatlands which are restored should continue to be eligible for decoupled payments.

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Degraded or drained agricultural peatlands account for approximately 2% of the EU’s agricultural land area yet are responsible for an estimated 20% (75 Mt CO2e) of total EU agricultural emissions, according to the ESABCC. Around 30,000 farmers in Ireland are farming on these lands.

Repurposing this minor share of EU agricultural land by rewetting peatlands could potentially deliver substantial mitigation benefits, the report details.

While restoring degraded agricultural peatlands would decrease agricultural production, the impact would likely be limited given the relatively small land area concerned, the report notes.

It also details that one of the main issues with current decoupled payments for degraded peatlands is that they can actively discourage restoration, for example not all forms of paludiculture, cultivating crops on rewetted peatlands, are eligible for direct payments.

The ESABCC has also recommended that coupled payments for livestock should be phased out over the next CAP.

It has said that coupled payments for animal production and decoupled payments for drained peatlands “incentivise greenhouse gas-intensive and maladaptive activities” and can be comparable to fossil fuel subsidies.

However, it also warns that “such a phase-out could have unintended consequences, for example, removing coupled payments for livestock production may push extensive grazing systems out of the market, which could result in a loss of grasslands with negative impacts on biodiversity and wildfire risks.”

The phase-out of these payments could possibly also adversely affect specific subsectors and regions and result in carbon leakage, it said.

“Ireland is almost fully decoupled with about 4% of payments currently under CAP are coupled and about 10% across the whole of the EU,” Karl Richards head of Teagasc’s climate centre told the Irish Farmers Journal.

He said that this recommendation does not have a huge impact on the current CAP due to Ireland’s low level of coupled payments, however it may deter proposals for more coupled payments under the next CAP.

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The European Commission’s proposal for the CAP (2028–2034), as published in July 2025 makes coupled payments a mandatory intervention for Member States and allows them to spend up to 20% of their income-support envelope to such payments, which is an increase from the 13% limit under the current CAP, according to the report.

The Advisory Board recommends that the EU should thoroughly consider alternatives for all current direct payments (coupled and decoupled), with the long-term ambition to replace them with alternative forms of income support that are better aligned with the EU climate objectives.

This would involve phasing out direct payments and reallocating the freed-up budget to other CAP instruments, for example, more targeted payments and incentives for ecosystem services and the use of alternative criteria as a basis for decoupled payments.

“The most straightforward way to achieve this is by setting a maximum payment rate (per hectare or per head, in case of coupled payments for livestock), and to then decrease this maximum payment rate over time,” the report says.

Ireland was one of three countries called out in the ESABCC report for ambitious national climate policies, Richards also said, with a legally binding target in place since 2018 to reduce agricultural emissions by 25% by 2030.

“This is a positive thing as many other countries don’t have targets like this,” he stated.

The subject of climate friendly diets was also discussed at the presentation however, Richards highlighted that Irish consumers are not very willing to adopt this type of diet as only about 4-6% of Irish consumers said they would adopt a climate friendly diet in a recent survey.

The report recommends that the EU should adopt an overarching food policy framework to support climate friendly diets choice.

The ESABCC also recommended that an agricultural greenhouse gas pricing system (AgETS) should be introduced in the EU to encourage the entire agri-food value chain to reduce agricultural emissions as the polluter would pay the price, however Richards said he does not see that coming into play.

The Advisory Board recommends a phased approach, starting with separate trading systems tailored to specific emission types. One would target non-CO2 emissions associated with activities such as fertiliser use and livestock production and the other would be dedicated to regulating land-based agricultural CO2 fluxes.

CBAM

To address the issue of carbon leakage, a carbon border adjustment mechanism (CBAM) could be put in place to ensure that emissions embedded in imported agricultural goods are subject to carbon constraints equivalent to those applied to domestic production.

However, a CBAM faces many challenges and opposition, especially in the current international situation.