Soil organic carbon (SOC) plays a crucial role in regulating the global carbon cycle and its feedbacks within the Earth system. Compelling evidence exists that soil carbon stocks have reduced in many regions of the world, with these reductions often associated with agriculture. In a Danish context, research also suggests that soil carbon stocks are declining. The scope of Payment for Ecosystem Service (PES) approaches to effectively and efficiently address climate regulation will depend on the spatial distribution of the carbon assimilation capacity, current land use, the value of avoided emissions and land owners’ objectives and preferences in terms of participating in initiatives to increase SOC. We map the carbon sequestration potential under different scenarios, value the potential sequestered carbon in terms of marginal costs of using voluntary agreements with agricultural land managers and compare these to the marginal abatement costs curve used in Danish climate policy. The cost effectiveness of reduced tillage as a climate mitigation PES scheme critically depends on the current debate on the net effects of carbon sequestration in reduced tillage practices. Based on existing IPCC guidelines, we find that reduced tillage has considerable potential for contributing to a cost effective climate mitigation policy.