LAST UPDATE | 14 Jan 2023
THE PARTNERSHIP OF semi-State forestry company Coillte and a British investment fund has been strongly criticised by the Irish Wildlife Trust amid concerns it will see the planting of only the “most commercially viable” woodland.
Environmentalists and farmers have criticised the scheme in part due to the involvement of Gresham House as the financial backer rather than the Irish government, while opposition parties have called for the proposal to be halted.
Coillte has defended the deal, insisting it needs to raise capital to plant and acquire forests for the strategy, with the fund estimated to cost €200 million.
Under the proposal, it will source the land for forestry, carry out the planting and management, thanks to the backing of UK asset and investment management firm Gresham House.
It is set to manage the forestry portfolio from its Ireland office in Dublin.
The scheme, known as the Irish Strategic Forestry Fund, was launched last week by Coillte. €25 million is being put up by the state through the Irish Strategic Investment Fund (ISIF).
It is part of the Government’s national afforestation target of planting 8,000 hectares per annum with the long-term target 18% forest cover.
Currently forest cover in Ireland is 11.6% compared to an EU average of 40%.
The Trust has strongly criticised the strategy, saying it goes against plans worked on by government groupings over recent years.
Padraig Fogarty, campaign officer for the body, said there is a fear any investor “will just want to get the cheapest land that’s available” with the tree species that produces the highest return, believed to be sitka spruce.
The non-native North American species has gained a notorious reputation owing to concerns on its impact on the biodiversity of the area it covers, with criticisms it leads to a “monoculture” environment.
Coillte has been prevented from buying lands for new forests for the past 20 years due to strict EU rules around state aid funding.
‘Plastered with more plantations’
“From an environmental point of view, what’s most important to us is what anyone does with the land,” Fogarty said.
“Our fear is that they’re just going to plaster it with more plantations of Sitka spruce.”
Fogarty said these would be most attractive from an investor’s perspective.
“At the moment you would get greater return on your investment for native woodlands over 15 years, because the premiums are much higher for native woodlands than they are for Sitka spruce plantations.
“But these are funds that are looking for very long term value and over the longer term that’s sitka spruce. You can replant it and go on and on. Whereas native woodlands after 15 years have no commercial value.”
He added that the “broader question” around the deal is “why are we providing grants for more spruce plantations when, in theory, the public doesn’t want them but will be paying for this 100%”.
For this Fogarty cited research carried out by Project Woodland, a body established in February 2021 by the Department of Agriculture to deliver a new strategy on woodland creation. The Irish Wildlife Trust is one of its partners.
Findings released by the department last March found that the public felt the most important benefits of forests were how they addressed climate change (25% of respondents) and enhanced air quality (15%), while 14% wanted to see forests contribute to wildlife and biodiversity.
“After all of that consultation, the government is turning around and giving more grants for sitka spruce plantation. That is a scandal because that it is so completely anti-democratic. I don’t know how they can even stand over that decision,” he claimed.
Addressing the criticism on RTÉ Radio One’s Countrywide programme this morning, Gresham House’s forestry investment director said it is looking for a diversified portfolio which would mean an “absolute minimum” of 20% broad leaf tree species in place of sitka spruce.
“Because we’re buying existing forests, some of the older forests will probably be a higher percentage of Sitka spruce and we will look to restructure those during the second rotation. We will definitely look at continuous cover forestry as well,” Joe O’Carroll told the programme.
When contacted, Coillte said Gresham House “has the scale and experience of managing large-scale privately funded forestry assets across the world” and has already attracted €35m from Irish investors.
“Coillte will use its broad expertise to source land, plant trees and manage these forests as part of its overall forest estate, ensuring open access to the public to enjoy these new forests,” a spokesperson said.
Imelda Hurley, Chief Executive of Coillte, said there is an urgent need for Ireland to meet its climate targets and that creating new forests is integral to this.
“The new Irish Strategic Forestry Fund represents an important first step towards accessing the capital required to enable the creation of new forests which will deliver the multiple benefits of forests for climate, nature, wood and people.”
Sinn Féin, Labour and the Social Democrats have each called for the policy to be reversed.
Social Democrats TD Holly Cairns said the department should be supporting farms to develop forestry, offering plantations as a way out of beef or dairy farming.
Labour’s Alan Kelly said the government should support Coillte directly through ISIF.
“If EU rules are a problem here blocking Coillte from planting more forests and receiving available grants, then the Minister should be pushing in Brussels for this to be changed so that the State can be a leader in forestry rather than outsourcing the profits to investors,” Kelly said.
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