The European Commission has approved a €250 million state aid package for Portugal’s forest sector, aimed at restoring affected areas and compensating landowners, with the scheme running until December 31, 2029.
According to Brussels, the measure complies with European Union state aid rules and will support investments in forest restoration following natural disasters, severe weather events, or other catastrophic incidents, in line with Portugal’s Strategic Plan under the Common Agricultural Policy.
The initiative also seeks to compensate landowners for income losses resulting from the conversion of agricultural and non-agricultural land into forest areas.
Support will be provided through direct grants in the form of fixed premiums, paid for up to 20 years. The goal is to encourage new forestry investments while offsetting income losses for landowners.
Read more: Portugal’s household savings rate falls to 12.1% in 2025
The scheme includes:
- reforestation premiums for landowners who stop agricultural activity or commit to maintaining new forest areas
- restoration premiums for those rebuilding forest potential after fires, storms, or other extreme events
The program is co-financed by the European Agricultural Fund for Rural Development, contributing up to €21.9 million, and is part of Portugal’s Common Agricultural Policy Strategic Plan.
The Commission concluded that the support is “necessary, appropriate and proportionate” to stimulate reforestation, with a limited impact on competition and trade within the EU.
The approval comes at a time of significant pressure on Portugal’s forests, following severe storms earlier this year that caused widespread damage, including fallen trees, landslides, and flooding across rural areas.
