Plans to dig out large amounts of Scotland’s precious peat from a landowner’s estate near Edinburgh look set to go ahead despite widespread opposition from conservationists and government.

A loophole in the law is likely to allow peat to be extracted from Auchencorth Moss on the Penicuik Estate in breach of local and national planning policy. Peat is a vital store of carbon, and is meant to be protected to help prevent climate pollution.

But because the application by a horticultural company is seeking to renew a 30-year-old old minerals permission, it can’t be rejected. If new conditions are imposed, compensation may also be payable.

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The situation has been condemned as “shockingly outdated and inconsistent” by environmentalists. They are calling on ministers to take urgent action to close the loophole.

The 3,000-hectare Penicuik Estate has been owned and run by the Clerk family since 1654. The family is currently headed by Sir Robert Clerk, the 11th Baronet of Penicuik Estate.

An estate tenant, Westland Horticulture, wants to extract 100,000 cubic metres of peat every year until 2042 from 240 hectares of Auchencorth Moss for use in gardens. Permission was originally given in 1986, and the company is now seeking to renew that under a ‘review of minerals permission’ process.

But the process only allows for planning conditions to be updated, and doesn’t permit the original consent to be withdrawn. It also involves paying applicants compensation if tougher conditions are imposed.

The peat extraction is planned to take place in a local wildlife area, and next to a site of special scientific interest protected under conservation law. Mining and using peat releases carbon pollution, which disrupts the climate – which is why Auchencorth Moss is monitored by scientists as an “atmospheric observatory”.

The Scottish Government’s planning policy says that peatlands should be protected, and two other recent applications have been rejected. The policy of Midlothian Council, which covers Penicuik Estate, suggests that peat extraction should not be permitted.

The renewed plans to exploit Auchencorth Moss have prompted objections from environmental groups. “This is a damaging proposal that would be completely contrary to local and national planning policy,” said Kate Bellew from the Royal Society for the Protection of Birds in Scotland.

“Although the site has suffered some damage from historic peat extraction for horticulture, the importance of peatlands for wildlife and carbon storage is now well known and alternatives to peat are also widely available for gardeners.”

She added: “Legislation covering historic mineral permissions seems shockingly outdated and inconsistent. There is an urgent need for Scottish legislation to be reviewed to stop the destruction happening on sites such as Auchencorth.”

The Scottish Wildlife Trust pointed out that lowland raised bogs were one of the most rare and threatened wildlife habitats in Scotland. “Auchencorth Moss would be much more valuable to society if protected, providing water filtration, wildlife habitat and carbon storage,” argued the trust’s conservation director, Susan Davies

“Peat free composts are available so there is absolutely no need for this archaic practice to continue.”

The renewed application has also been opposed by the government’s wildlife agency, Scottish Natural Heritage. It says that measures proposed to protect the neighbouring site of special scientific interest are “inadequate”.

According to Midlothian Council, the application was being assessed with “a likely decision date” in July or August. “The council will consider all representations received,” said a council spokeswoman. “The council will also have regard to the legislative provisions relating to existing minerals planning permissions.”

The Scottish Government said it would be inappropriate to comment on a live application. “Scottish Government planning policy is clear that the review of permissions for mineral developments every 15 years should be used to apply up-to-date operating and environmental standards,” said a government spokeswoman.

Penicuik Estate said that it was up to Midlothian Council to fully consider the application. Westland Horticulture declined to comment.