The correct answer is C: Partially decayed vegetation is placed under high-pressure, anaerobic, acidic conditions.
The formation of peat occurs in very specific geographical locations that have certain conditions.
The area where peat formes must be waterlogged, a low pH (which implicates is acid), has a low nutrient availability and low oxigen supply. As a result, the decomposition of the organic matter happens at a low rate in an anaerobic condition and is incomplete.
As the decomposition is incomplete the partially decomposed matter remais in the area and starts to accumulate, and after that is becomes compacted.
This process changes te chemical and physical conditions of the ground in that area making it toxic for certain plants and as a result biodiversity is reduced in that location.