European money for green technologies in the Romanian forestry sector

The Romanian authorities have recently approved a state aid scheme aimed at boosting investment 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 Gazette of Romania No 475 of 23 May 2024, details the conditions for granting this substantial financial support.

What's new about this scheme? Firstly, 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 ropeways that allow timber to be collected from hard-to-reach areas while limiting the impact on the soil. Or high-performance shredders that will increase biomass utilisation. Of course, there's also software to make the whole process more efficient, from harvesting to storage.

The aid is substantial and can cover 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 support. Basically, investment in retrofitting is more affordable than ever.

Forestry offices are not forgotten either. Funds of up to €250,000 per project are available for them. The money can be used to buy equipment for tree care work, monitoring and risk control, and harvesting machinery. In other words, it creates the conditions for more efficient and sustainable forest management.

The project selection criteria aim to reward performance and environmental orientation. Priority will be given to large economic operators and forestry offices, those that allocate a significant proportion of their budget to the purchase of ropeways and protection equipment. Forest owners' associations will also be favoured, a sign of an inclusive approach.

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

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

Budget allocated - deadline for implementation

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

Beneficiaries and eligible investments

Romanian economic operators certified for logging works, as well as 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 for difficult to access areas
• Wood chippers for better biomass utilisation
• High-tech equipment for monitoring and combating specific risks
• Software applications dedicated to business optimisation

Aid intensity and advance payment

The grant may cover up to 65% of the 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, beneficiaries will be able to apply for an advance of 50% of the grant amount immediately after signing the grant contract.

Advantageous selection criteria

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

• Operators with large operating and management capacity
• Applicants willing to allocate a significant proportion of the investment to forest protection equipment
• Entities managing forest land owned by owners' associations

Multiple benefits for the Romanian economy

The main benefit is to promote modern, efficient and sustainable forest management. In addition to the potential direct economic benefits for operators in the sector, 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 of the procedure for accessing funds.