Forests and other wooded lands cover around 42% of EU’s land area and provide a multiplicity of benefits supporting human wellbeing. These benefits are known as ecosystem services. In addition, forests provide economic, social and environmental values. Ensuring those values, as well as maintaining the ecosystem services provided by forests is only possible by implementing a sustainable forest management approach. Ensuring the multifunctional role of forests to supply provisioning services, such as timber, and at the same time provide regulating and cultural services is one of the aims of sustainable forest management. Nevertheless, most of the income in forestry is from timber production, whereas other non-marketed ecosystem services would require incentives for its provision, which would be oriented to satisfy increasing societal demands. Payments for Ecosystem Services (PES) represents one alternative and voluntary way to secure financial sources for multifunctional and protective forest management and sustainable maintenance of ecosystem services. The aim of this report is to present an overview of PES implementation in forest ecosystems in Europe. A SWOT analysis is presented based in the analysis of first, policy drivers related with PES at the EU level, second literature review, and finally a comparison of best practices in PES. In the policy drivers section, we address the main EU policy documents, such as the Biodiversity Strategy, the EU Forest Strategy and other related with PES. Best practices from European countries are shown in the case studies of established and functional PES schemes. The SWOT analysis unveils challenges and potentialities for PES schemes development and implementation. The reviewed strategic and policy documents at EU level call for sustainability, development, cooperation and fostering of forest biodiversity. This opens new opportunities for creating and establishing suitable instruments and one of them is represented by PES schemes. The implementation process of PES schemes reveals some weaknesses and threats, for example the issue of sound valuation methods for ecosystem services. The report concludes by considering all aspects from the best practices identified in the case studies. Finally, despite the fact that PES are not a final solution to ensure sustainable forest management, it is possible to successfully implement PES schemes as part of policy instruments promoting the sustainable management or conservation of European forests., JRC.D.1-Bio-economy