EU Commission approves €720m French State aid scheme to support forestry sector

The European Commission has approved, under EU State aid rules, a €720 million French scheme to support the forestry sector. The measure will contribute to the achievement of the objectives of the EU’s Common Agricultural Policy by strengthening forest environmental protection.

The French measure

France notified the Commission of its plans to support operators in the forestry sector in the prevention and restoration of damage to forests. The scheme will cover damage to forests resulting from forest fires, natural disasters, adverse climatic events, plant pests, infestations, catastrophic events and climate change-related events, in the period between 2023 and 2029. The scheme forms part of the forestry renewal plan of the France 2030 investment plan. The scheme, with a budget of €720 million, will run until 31 December 2029.

Under the scheme, the aid will take the form of direct grants to companies active in the forestry sector which intend to implement prevention and restoration measures. The aid will cover up to 100% of the eligible costs.

The Commission’s assessment

The Commission assessed the scheme under EU State aid rules, in particular Article 107(3)(c) of the Treaty on the Functioning of the European Union (‘TFEU’), which allows Member States to support the development of certain economic activities under certain conditions, and under the 2022 Guidelines for State aid in the agricultural and forestry sectors and in rural areas (‘2022 Agricultural Guidelines’).

The Commission found that:

• The measure facilitates the development of an economic activity, namely activities for the prevention and restoration of damage to forests.
• The measure is necessary and appropriate to rebuild affected forests and foster the development of forestry in the context of climate change.
• The aid is proportionate, as it is limited to the minimum necessary and will have a limited impact on competition and trade between Member States.
• The aid brings about positive effects that outweigh any potential distortion of competition and trade in the EU.

On this basis, the Commission approved the French scheme under EU State aid rules.

Background

The 2022 Agricultural Guidelines provide guidance on how the Commission will assess the compatibility of aid measures in the sector, which are subject to the notification requirement, under Article 107(3)(c) TFEU. The Guidelines create a flexible, fit-for-purpose enabling framework to help Member States provide the necessary support and contribute, among other things, to the objectives of the Common Agricultural Policy. The 2022 Agricultural Guidelines aim to help Member States design national measures and meet national and EU’s goals at the least possible cost for taxpayers and without undue distortions of competition in the Single Market

The non-confidential version of the current decision will be published under the case number SA.109083 in the State Aid Register on the Commission’s competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.