Mon. Jul 15th, 2024

Brussels, 2 August 2023

The European Commission has approved, under EU State aid rules, a €308 million Irish scheme to support investments in afforestation.

The scheme is aimed at supporting the expansion of the Irish national forest estate on both public and private land, to deliver lasting benefits for the climate, biodiversity, wood production, economic development, employment, and quality of life. The target of the scheme is to reach 18% forest cover in Ireland by the end of 2027 (compared to 11.6% today) by establishing 8.000 hectares of new diverse, multifunctional and climate-resilient forests per year. Under the scheme, the aid will take the form of direct grants, covering up to 100% of the eligible costs. The scheme, which will run until 31 December 2027, will be open to companies of all sizes in the forestry sector.

The Commission assessed the scheme under EU State aid rules, in particular Article 107(3)(c) TFEU, which allows Member States to support the development of certain economic activities under certain conditions, and the 2023 Guidelines for State aid in the agricultural and forestry sectors and in rural areas. The Commission found that the scheme is necessary and appropriate to support afforestation in Ireland. It will strengthen environmental protection, including biodiversity and climate action, and contribute to achieving the EU’s environmental and climate-related objectives, as well as strengthen the socio-economic fabric of rural areas. Moreover, the scheme will have an ‘incentive effect’ as the beneficiaries would not carry out the investments without public support. Furthermore, the Commission concluded that the scheme is proportionate, as it is limited to the minimum necessary, and will have a limited impact on competition and trade between Member States. On this basis, the Commission approved the Irish scheme under EU State aid rules.

The non-confidential version of the decision will be made available under the number SA.107220 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.

Source – EU Commission

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