Evaluating the investment attractiveness and carbon credit potential of short rotation willow plantation on a cutaway peatland

The expansion of short-rotation coppice (SRC) willow (Salix spp.) is often constrained by competition with food crops on mineral arable lands. Cutaway peatlands, degraded by peat extraction, offer an alternative land use, but their financial and environmental viability remains uncertain. This study evaluates the investment attractiveness and greenhouse gas (GHG) balance of willow SRC established on an abandoned cutaway peatland compared with a mineral arable land. Financial analysis employed net present value (NPV), internal rate of return (IRR), and payback period to evaluate investment performance under different economic and carbon pricing conditions. Carbon outcomes were calculated using empirical net ecosystem carbon balance (NECB) data from willow-cultivated peatland, combined with emission factors (EFs) for a cutaway peatland. Analyses also examined cultivated peatland emission profiles to evaluate outcomes under conditions of land-use transition. Under the cutaway peatland baseline, the SRC willow plantation achieved a modest IRR of 5.7 %, indicating limited financial viability without policy incentives, and remains a moderate emitter at the biomass production value chain level. Generally, profitability and additionality were highly sensitive to wood chip prices, baseline selection, and carbon price assumptions. In conclusion, SRC willow cultivation on abandoned cutaway peatlands can support climate mitigation and rural development if backed by targeted carbon policies. • Willow plantations on cutaway peatlands are significantly less profitable (IRR 5.7 %) than on mineral arable land (IRR 19.7 %). • Sensitivity results show that wood chip price, yield, and harvesting costs are the main factors influencing profitability. • Cutaway peatland plantation remains a moderate emitter at the biomass production level, yielding no carbon credit. • Integrating carbon credits for avoided emissions improves profitability of alternative drained cultivated peatlands.