How Bavaria Can Build a Climate-Positive Building Materials Industry and Take the Lead in Peatland Innovation
Action Areas for Promoting the Use of Biomass from Peatlands for Materials in Bavaria’s Construction Sector
Peatlands cover only 3% of the world’s land area, but store twice as much carbon as all the world’s forests combined. In Germany, over 90% of peatland soils have been drained and have been continuously releasing CO₂ ever since. At the same time, paludiculture—that is, the agricultural and forestry use of rewetted peatland soils—holds enormous potential for climate protection and a sustainable construction industry.
Building materials made from peatland plants such as sedges, cattails (Typha), or reed can bind large amounts of carbon dioxide and store it in buildings over the long term. Research shows that cultivating building materials on wet peatlands can offset the “carbon footprint” of conventional building materials such as concrete. Climate-positive buildings using peatland building materials are therefore already conceivable today. The Federal Ministry for the Environment also unveiled a new funding program this week: By the end of 2029, the federal government will provide 1.75 billion euros to rewet 90,000 hectares of peatland while allowing for continued agricultural and forestry use.
However, this breakthrough in the construction sector requires targeted incentives. A new policy brief by Niklas Fanelsa (Professor of Architecture and Design, Technical University of Munich) and Nele Ziegler shows how Bavaria can promote the use of paludiculture materials in the construction sector.
Key Focus Areas
Connecting Stakeholders
Developing a new regional value chain requires cooperation among all stakeholders, from peatland management to the building materials industry and construction companies, as well as academia and government agencies. Currently, the introduction of paludiculture building materials is stalled because everyone is waiting for everyone else: farmers are hesitant without a market, and processors lack raw material suppliers. The construction industry has already signaled interest; demand is not the problem. A strong network can break this deadlock and build trust.
Specifically, Fanelsa and Ziegler recommend establishing a central coordination office to consolidate supply and demand and provide technical and legal advice. In addition, a Bavarian innovation platform called “Paludikultur-Bauen” should be created, supported by the ministries of the environment, economic affairs, and construction, to regularly bring together farmers, associations, manufacturers, construction companies, and architects. Binding partnerships with purchase guarantees and supply commitments are intended to provide planning certainty.
Strengthening the political framework and financial incentives
Since 2024, Bavaria has taken important first steps with the “Moorbauern” program: Farmers on drained peatlands receive subsidies for rewetting, particularly when they begin practicing paludiculture. However, this agricultural support must be supplemented by measures in industrial and construction policy. A material-neutral approach that treats all materials equally fails to recognize the specific climate and regional benefits of Paludi building materials.
The policy brief recommends a support fund offering grants and low-interest loans to companies that build production facilities or implement pilot projects. Funding rates should be higher at the outset and gradually reduced to reward early pioneers and mitigate initial risk. In addition, tax incentives for climate-friendly building materials should be introduced, and the costs of material approvals—similar to previous programs for natural insulation materials—should be partially covered by public funds to make Paludi products available for use in construction more quickly. In the long term, stricter requirements for reducing the embodied carbon emissions of buildings must be established, which will give sustainable materials a structural market advantage. Paludi-culture materials should also be incorporated into Bavaria’s Bioeconomy Strategy and Climate Protection Program.
Promoting Research, Development, and Scaling Up
Despite positive pilot projects and prototypes, paludiculture-based building materials are still in their infancy. Bavaria is home to strong research institutions—including TUM, Weihenstephan-Triesdorf University of Applied Sciences, and the Fraunhofer IBP—whose findings must now be translated into industrial applications. Results from collaborative projects such as MOORuse (2016–2022) have already demonstrated how paludiculture can be established and linked to regional value creation.
New interdisciplinary R&D collaborative projects are needed to specifically address economic and technical hurdles. The transition from the laboratory to industry also requires targeted funding for pilot plants in peatland regions. At the same time, standardization and certification of paludiculture building materials must be advanced, and training programs and educational modules for planners and tradespeople must be developed to promote acceptance and proper use of the new materials.
Capitalizing on Economic Opportunities and Regional Value Creation
Promoting paludiculture-based building materials is both climate policy and economic policy. Bavaria can use this to build a new economic sector that strengthens rural regions and creates exportable expertise. As the largest peatland in southern Germany, the Altbayerisches Donaumoos offers great potential for regional value creation—from rewetting to the construction trade. With companies like iStraw and Typha Technik, Bavaria already has pioneers who could lay the foundation for strong market expertise in the field of sustainable building materials.
Suitable peatland areas should be identified, and regional land-use concepts should be developed in collaboration with farmers. In model regions such as the Donaumoos or the Schwäbisches Donauried, the entire chain from cultivation to sales can be tested. Bavaria’s existing strengths in the timber construction and insulation materials industries offer industrial synergies and can integrate Paludi products.
Public Construction Projects as Drivers of Market Development
As a building owner, the public sector can play a decisive role in bringing sustainable materials to market. The use of paludiculture building materials in public buildings such as schools, visitor centers, residential buildings, or administrative facilities creates showcase projects that foster acceptance and trust within the industry. As was once the case with wood construction, Bavaria can lead the way here as well with ambitious standards. Public procurement processes should incorporate sustainability criteria and, when products are of equivalent quality, give preference to eco-friendly materials. A state program could offer municipalities financial incentives to use Paludi materials, thereby offsetting any additional costs.
Conclusion
After decades of stagnation, there is a sense of optimism surrounding the use of peatland-based materials in the construction industry. The climate crisis and new policy directions—ranging from the national peatland conservation strategy to CO₂ pricing in construction—are creating both pressure and opportunities. Through decisive action, Bavaria can bridge the gap between research and practice and build a climate-friendly industry of the future. Innovations such as peat-based building materials uniquely combine climate protection, resource conservation, and regional economic growth. “Germany is strong in research; now it must also become strong in implementation,” say Fanelsa and Ziegler.
Disclaimer
The content and views expressed in this policy brief reflect solely the opinions of the authors and should not be attributed to the TUM Think Tank as an institution or to its members.
