EC OKs EUR 200 M Romanian aid scheme for forest owners with exploitation restrictions

The European Commission has approved a Romanian state aid scheme worth 200 million euros (998 million lei) intended to compensate forest owners for the wood they did not cut, as a result of some ecological restrictions.

The restrictions on the exploitation of wood imposed on owners who own forest areas have as their objective the stopping of the phenomenon of biodiversity degradation and its reversal, the improvement of ecosystem services and the preservation of habitats and landscapes, reports a press release from the EC.

The support will take the form of direct grants to private forest owners. The aid scheme will end on December 31, 2027. The amount of aid per beneficiary will be calculated based on the average price of a cubic meter of wood and the average annual volume of unexploited forest per hectare and per year.

The Commission assessed the measure under EU State aid rules, in particular under the European Union State Aid Guidelines and Article 107(3)(c) of the Treaty on the Functioning of the European Union, which allows Member States to support the development certain economic activities under certain conditions.

The Commission found that the scheme is necessary and appropriate to encourage forest regeneration. In addition, the Commission concluded that the scheme is proportionate and will not have undue negative effects on competition and trade within the EU. On this basis, the Commission approved the scheme under EU state aid rules.