Finnish forest agency tightens environmental subsidy rules amid funding shortfall

The Finnish Forest Centre has abruptly tightened eligibility criteria for environmental subsidies, meaning only the most ecologically valuable forests will now qualify for funding, Yle reports.

From March 18 onward, subsidies will be granted exclusively to forests classified as “particularly important habitats” under the Forest Act or as top-tier sites in the Metso biodiversity programme. The change follows a surge in applications from landowners seeking temporary protection for their forests, combined with a 20% increase in subsidy rates since June 2023.

Last year, €12.3 million was allocated for environmental subsidies—far short of the €15–20 million needed to meet demand. The shortfall stems from higher compensation for deadwood preservation and a government decision to raise the base price used to calculate payments.

Jarkko Partanen, head of financing and inspections at the Forest Centre, confirmed that applications submitted before March 18 will still be processed under the old criteria. Going forward, only forests meeting the strictest Metso standards—such as herb-rich forests, spring-fed groves, and riparian zones—will qualify. For semi-natural boreal forests, a minimum size of three hectares is now required.

The sudden policy shift has caught forest management associations off guard. Sami Paananen, sales manager at the Central Finland Forest Management Association, called the announcement “a wet rag to the face,” noting that dozens of pending applications must now be reassessed. Some associations had hired staff specifically to handle subsidy paperwork, only to face uncertainty over future workloads.

“This proves you can’t build a business on government subsidies when decisions can flip so abruptly,” Paananen said.

The Forest Centre does not systematically track what happens to protected forests once their 10-year subsidy period ends. While some may gain permanent protection, Partanen acknowledged that others are likely to be logged. The agency will monitor the situation but has no immediate plans to revise the new criteria.