European money for green technologies in the Romanian forestry sector

The Romanian authorities have recently approved a state aid scheme aimed at boosting investments in modern and environmentally friendly technologies in the forestry sector. Order No 201/2024 of the Ministry of Agriculture and Rural Development, published in the Official Journal of Romania No 475 of May 23, 2024, details the conditions for this substantial financial support.

What is new in this scheme? First, a breath of fresh air for logging companies. They will be able to access grants of up to €500,000 to buy new, more environmentally friendly equipment and machinery. Think of modern funiculars that can collect wood from hard-to-reach areas while limiting the impact on the soil. Or high-performance chipping machines that will increase the use of biomass. And, of course, there are the software programs to streamline the whole process from harvesting to storage.

The aid is substantial, covering up to 65% of eligible costs. And the even better news is that, after signing the contract, beneficiaries can receive an advance of up to 50% of the amount of support. In practical terms, investing in retrofitting is more affordable than ever.

Forestry offices are not forgotten either. Funds of up to €250,000 per project are up for grabs. The money can be used to buy equipment for tree care work, monitoring and combating risks, or for chipping machines. In other words, it paves the way for more efficient and sustainable forest management.

Project selection criteria aim to reward performance and environmental orientation. Priority will be given to large-scale economic operators and forestry offices, which allocate a significant proportion of their budget to the purchase of cableways and protective equipment. Forest owners' associations will also be favored, a sign that an inclusive approach is sought.

What does all this mean for the timber industry as a whole? I say it's an important step towards a sustainable and competitive forest economy. Logging will be done with modern machinery and biomass losses will be reduced. Beyond the immediate benefits for companies, the scheme will also stimulate related sectors. I'm thinking first and foremost of forestry machinery dealers, who can expect an increase in demand. Then, if we have better managed forests and a better harvested raw material, the whole industry stands to gain in the long term.

We have structured all this information below to make it easier to follow for those involved.

Budget allocated - implementation deadline

The total budget allocated to this measure in Romania is more than 86 million euro, mostly from non-reimbursable European funds. These financial resources will be available until December 31, 2029, providing a generous time horizon for project implementation.

Beneficiaries and eligible investments

The Romanian economic operators certified for forest exploitation works, as well as the forestry offices, will be able to access these funds for the purchase of high-performance equipment and machinery with reduced environmental impact. The list of eligible investments includes:

• Cableways (funicular railways) for hard-to-reach areas
• Wood chippers for better biomass recovery
• High-tech equipment to monitor and combat specific risks
• Business optimization software applications

Aid intensity and consistent advance

The grant may cover up to 65% of total eligible expenditure, with the following maximum ceilings:

• 500.000 euro per project for economic operators
• 250.000 euro per project for forestry offices. In addition, the beneficiaries will have the possibility to request an advance of 501TPTP3T of the amount of the grant immediately after signing the grant contract.

Advantageous selection criteria

Projects will be selected on the basis of criteria that will benefit:

• Operators with high operational and management capacity
• Applicants willing to allocate a significant proportion of their investment to forest protection equipment
• Entities managing forest funds owned by owners' associations

Multiple benefits for the Romanian economy

The main benefit is the promotion of modern, efficient and sustainable forest management. In addition to the potential direct economic benefits for forest operators, the scheme can generate indirect positive effects such as:

• Stimulating local industry by increasing demand for machinery and services
• Creating new jobs in rural areas
• Attracting know-how and innovative technologies
• Contributions to Romania's efforts to protect the environment and combat climate change

Further information will be available in the coming period on the websites of the Ministry of Agriculture and Rural Development and the Romanian Rural Investment Financing Agency. Potential beneficiaries are encouraged to consult the applicant's guide for details on how to access the funds.