Soil carbon sequestration and avoidable emissions through peatland restoration are both strategies to tackle climate change. Here we compare their potential and environmental costs regarding nitrogen and land demand. In the event that no further areas are exploited, drained peatlands will cumulatively release 80.8 Gt carbon and 2.3 Gt nitrogen. This corresponds to a contemporary annual greenhouse gas emission of 1.91 (0.31-3.38) Gt CO2-eq. that could be saved with peatland restoration. Soil carbon sequestration on all agricultural land has comparable mitigation potential. However, additional nitrogen is needed to build up a similar carbon pool in organic matter of mineral soils, equivalent to 30-80% of the global fertilizer nitrogen application annually. Restoring peatlands is 3.4 times less nitrogen costly and involves a much smaller land area demand than mineral soil carbon sequestration, calling for a stronger consideration of peatland rehabilitation as a mitigation measure.