Organisers of the July music extravaganza revealed they have donated her appearance fee to various environmental projects.
The sum has been spent on a tree repopulation programme, research into bee habitats, and a scheme to increase local business partnerships to cut down on travel.
Promoters admit the festival will still have a negative impact on the environment, but the new measures will help with ongoing improvement.
Lily withdrew from the UK event in March, with organiser John Giddings saying: "I think the poor girl has got a few problems. Unfortunately England, although it produces good girl singer/songwriters, they don't seem to be capable of running the course.
"I find it very disappointing. These artists don't seem to have a responsibility to their audience."
This year's headliners at the festival, which will be held from June 13-15, are The Police, Kaiser Chiefs and Sex Pistols.
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