Ireland’s Forestry Programme 2014-2020 was approved by the Government and secured State aid approval from the European Commission in 2015. The scheme provides financial support of up to 100% of the cost of establishment as well as an annual premium each year up to 15 years.
My Department has sought to address falling planting rates through the introduction of higher rates and premiums, arising from the Mid-Term Review of the Forestry Programme, for new forestry planting – with grants increased, for example, by 2% to 7% depending on the species category and the premiums for certain categories increased by 5%. Currently, under the most popular planting category, the premium rate is €520 per hectare for planting areas greater than 10 hectares. The grants and premiums available under the programme represent a considerable investment by the National Exchequer in afforestation and the 15 year rule will remain in place for the current Programme, as per State Aid approval.
While the Forestry Programme does not cover the cost of reforestation, forest owners can realise their asset through clear-felling, when their forest matures. It should be noted that since 1/1/2016 changes to taxation rules means that income from felling is no longer subject to the High Earners Income Tax restriction which limited the exemption to €80,000 per annum. Furthermore, under paragraph (591) of the European Union Guidelines for State aid in the agricultural and forestry sectors and in rural areas 2014 to 2020, State aid is not allowed for reforestation grants where felled trees are replaced with equivalent ones.
As payment for reforestation is not provided for under the current Forestry Programme, no further premiums are paid once the 15 year period has elapsed.