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Decayed or decaying organic matter but not the type that gets in your eyes - normally. Moss is the most common for the Northern Moorlands. But there are peat forests in Borneo. The whole forest floor can become a peat bog. The edge of mangrove swamps can also form peat. Peat is found all over the world in all climates - from arctic tundra to the tropical rain forest.The underground decay of the organic matter generates heat. This can become so intense that it will catch fire. It is one reason that a compost heap is a.) mixed with dirt and b.) turned regularly. These two actions reduce the possibility of the organic matter being destroyed by combustion (That is a big word for "fire," Neil. Just want to help out.)
Please don't buy peat (or Pete) to put on your garden! Digging it out of peat bogs destroys the habitat of myriads of living organisms which only live in that habitat.