European Commission has approved a €1.04bn ($1.23 bn) Danish scheme under EU State aid rules to support landowners who voluntarily remove agricultural or forestry land from production to cut emissions and improve water quality.
The scheme will provide grants to landowners who permanently cease agricultural activity, allowing land to be restored through rewetting and the creation of wetlands. The measure aims to reduce greenhouse gas emissions as well as nitrogen and phosphorus runoff into aquatic environments.
Under the programme, land will no longer be tilled and the use of fertilisers and pesticides will stop. In some cases, projects may include the installation or relocation of fencing to enable grazing that supports biodiversity and nature management.
Additional compensation may be granted where forest land connected by water to agricultural land is also taken out of production. Forest areas permanently set aside cannot return to commercial production, including after a change of ownership, to ensure long-term environmental benefits.
Eligible costs include non-productive investments, compensation for permanent income loss, and legal and administrative expenses related to land consolidation. Aid will be provided as direct grants or in-kind support such as technical consultancy, covering up to 100% of eligible costs. The scheme will run until 31 December 2030.
The Commission assessed the measure under Article 107(3)(c) of the Treaty on the Functioning of the European Union and the 2022 Guidelines for State aid in the agricultural and forestry sectors. It concluded that the scheme supports the development of economic activity, has an incentive effect, is necessary and proportionate, and that its positive environmental impacts outweigh any potential distortions of competition.
The approval forms part of Denmark’s broader land transformation strategy aimed at reducing climate pressures, protecting drinking water, improving aquatic ecosystems and enhancing biodiversity.
