The government’s €1.3 billion forest program (2023-2027) has yet to be ratified by the European Commission for state aid approval, it has been revealed.
The Department of Agriculture says it has introduced new “transitional arrangements” to ensure those with valid license permits can take advantage of the current planting season under the higher subsidy and premium rates proposed under the new scheme.
As of yesterday, 73 afforestation applications and 15 road applications have been approved under the transitional arrangements.
This comes amid ongoing controversy over Coillte’s decision to partner with a UK-based asset manager to set up a new forestry investment fund – which relies on Department of Agriculture grants and premiums – to boost new commercial planting rates in Ireland.
While Coillte insists her partnership with Gresham House is key to meeting Ireland’s climate targets, farmers fear they will be squeezed out of the rural market and critics claim the move will hurt rural economies and damage confidence in forestry.
Agriculture Secretary Charlie McConalogue and Agriculture Secretary Pippa Hackett will be questioned by the Joint Oireachtas Agriculture Committee tomorrow about the debacle.
When asked why the state aid approval for the new forest program, which is expected to start on January 1, has been delayed, a ministry spokesman said:
“The previous guidelines for state aid in agriculture, forestry and rural areas expired on December 31, 2022 and have now been replaced by a revised version effective January 2023.
“The formal state aid application for the new forest scheme could not have been submitted to the European Commission until the revised guidelines were in place.
“The Ministry is working hard to submit the formal application and obtain full grant approval for the 2023-2027 forest program as early as possible.
“This department indicates the urgency with which planting activities must take place, given our ambitious goals and the need to ensure the continuation of work for this sector.
“In view of this, the Ministry has introduced new transitional regulations. Under the Transition Scheme, applicants can receive annual payments of up to €1,103 per hectare for 20 years, significantly higher than the rates of the previous afforestation scheme.
“All valid license holders as of December 31, 2022 can proceed with planting and road construction, and requests to proceed with planting now under the proposed new grant and premium rates are already being received and processed by the department.
“The launch of the program is a top priority for the Department and officials are working closely with the Commission on this matter to secure full state aid approval as early as possible.”
When asked why Ireland’s new forest program has not yet been approved, a spokesman for the European Commission said: “The Commission is in contact with the Irish authorities on this matter. We cannot comment on the content of these contacts, nor anticipate their timing or outcome.”
In general, it is considered that the length of the Commission’s assessment of State aid measures depends on a number of factors, including the timing and quality of the information provided by the Member State concerned or the complexity of the measure.
