The Department of Agriculture is seeking legal advice on whether it can pay out afforestation grants and yearly forestry payments directly to Coillte.
Coillte cannot currently draw down subsidies for afforestation, but updated EU rules governing State aid came into force on 1 January 2023 which may allow the agency to avail of forestry payments.
Minister of State at the Department of Agriculture Pippa Hackett said the new set EU state aid rules open up the possibility of public landowners availing of State forestry funding, but that clarification is still needed.
“It is welcome now in 2023 that we might well be able to support Coillte to afforest,” Minister Hackett told the Dáil last Thursday.
Coillte had sought clarification from the EU on receiving State planting payments in 2019 but was “clearly told no” by the European Commission, the minister said.
The agency’s planting was backed by State subsidies up until 2003, when the European Court of Justice ruled that Coillte was not eligible to receive aid for afforestation under EU rules.
Sinn Féin TD Martin Browne stated that rule change should have been clarified as the State aid rules were being finalised, rather than after they had come into play.
Browne suggested that alternatives to the Gresham House-Coillte planting model could have been pursued by the State agency if the Department had asked earlier what the changes mean.
“The Department knew negotiations with Gresham House were taking place and at that time it was looking for the alternative way to benefit from the State aid,” Brown argued.
“Why then did the minister of state and the other minister at that time not seek clarity about the potential beneficiaries under the draft revisions before the Gresham House deal was signed off, and before State aid rules were published in December 2022?”