Oireachtas Joint and Select Committees
Tuesday, 13 December 2022
Joint Oireachtas Committee on Agriculture, Food and the Marine
Forestry Strategic Vision: Coillte
Jackie Cahill (Tipperary, Fianna Fail)
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Apologies have been received from Senator Paul Daly, who, unfortunately, has a family bereavement. Before we begin, I remind members, witnesses and those in the Public Gallery to switch off their mobile phones. The purpose of today's meeting is to undertake an examination of the forestry strategic vision. In this session we will hear from Ms Imelda Hurley, chief executive of Coillte and Mr. Mark Carlin, managing director of Coillte Forest. All those present in the committee room are asked to exercise personal responsibility to protect themselves and others from the risk of contracting Covid-19.
Witnesses giving evidence within the parliamentary precincts are protected by absolute privilege in respect of the evidence they give to a committee. This means that witnesses have full defence in any defamation action for anything said at a committee meeting. However, witnesses are expected not to abuse this privilege and may be directed to cease giving evidence on an issue at the Chair's direction. Witnesses should follow the direction of the Chair in this regard and are reminded of the long-standing parliamentary practice to the effect that, as is reasonable, no adverse commentary should be made against an identifiable third person or entity. Witnesses who give evidence from a location outside the parliamentary precincts are asked to note that they may not benefit from the same level of immunity from legal proceedings as a witness giving evidence from within the parliamentary precincts and may consider it appropriate to take legal advice in this matter. Privilege against defamation does not apply to publication, outside the proceedings held by the committee, of any matters arising from the proceedings. Members are reminded of the long-standing parliamentary practice that members should not comment on, criticise, or make charges either against a person outside the House or an official either by name or in such a way as to make him or her, identifiable. Parliamentary privilege is considered to apply to utterances of members participating online in the committee meeting when their participation is from within the parliamentary precincts. There can be no assurance in relation to participation online from outside the parliamentary precincts and members should be mindful of this when they are contributing.
The agenda for today relates to the forestry strategy vision. I now call on Ms Hurley to read her opening statement.
Ms Imelda Hurley:
I thank the Chairman. I wish members a good evening and thank them for the opportunity to engage with the committee on Coillte’s forestry strategic vision. I am accompanied by Mr. Mark Carlin, managing director of Coillte Forest. I will begin with a short overview of Coillte.
Coillte is the largest forester in Ireland, responsible for managing 440,000 ha, that is, 7% of the land area of Ireland. We are the largest producer of certified wood, a sustainable resource. We are also the largest provider of outdoor recreation in the country. We enable wind energy, we manufacture panel products and we undertake nature rehabilitation projects of scale. The Coillte estate accounts for around half of Ireland’s forests, with a wide variety of habitats, from conifer, mixed and broadleaf forests, to open upland bogs and heath lands, to lakes and rivers. Since 1989, Coillte has continuously evolved and we have enabled the development of a vibrant forestry and wood products sector that supports rural employment throughout Ireland. While we have always managed our forests sustainably, we believe that the growing climate challenge requires a greater focus.
We employ 840 staff and support approximately 1,200 direct contractors, while the overall forest sector supports approximately 9,000 jobs, mostly in rural Ireland. Coillte’s forestry business underpins a thriving forest products sector, which supports around €2.5 billion of economic activity annually. Wood is a valuable commodity and is used in the construction of our homes, in pallets which help move our products around, in fencing and lifestyle products for our gardens and farms and in the manufacture of panel-board products like oriented strand board, OSB, and medium-density fibreboard, MDF, which is used in furniture. Using Irish wood and wood-based products for construction is a climate efficient and sustainable substitute for conventional carbon intensive products, such as concrete and steel.
At present, Ireland has one of the lowest levels of forest cover in Europe, at approximately 11.6%, in comparison with a European average of over 40%. We welcome the Government’s new forestry programme, worth €1.3 billion, the largest investment to date by the State in afforestation.
Coillte is comprised of three operational segments, namely, Coillte Forest, land solutions, and Medite Smartply. Coillte Forest is responsible for growing forests sustainably to provide multiple benefits to society, including the production of quality wood and wood products. Our forest estate has both Forest Stewardship Council, FSC, and Programme for the Endorsement of Forest Certification, PEFC, accreditation. Over 90,000 ha of our estate, that is, 20%, is currently managed primarily for biodiversity with these areas containing a wide variety of habitats including native forest, mixed forest, blanket bog, raised bog and wet and dry heath. We have developed a science-based approach called BioForest, which classifies the ecological value of the biodiversity areas in our estate, and allows us to develop ecological and silvicultural plans to enhance or restore sites to improve biodiversity.
Our land solutions division provides innovative commercial solutions to support industries such as renewable energy, housing, healthcare, education, infrastructure development, water and tourism. In 2021, with the ESB, we launched a new joint venture renewable energy company, FuturEnergy Ireland, to develop wind energy, enabling Ireland to combat climate change and contribute to more sustainable living. Coillte Nature is also part of our overall land solutions division. It operates on a not-for-profit basis and is dedicated to the restoration, regeneration and rehabilitation of nature through large-scale projects across four strategic themes, namely, afforesting, restoring, regenerating and rehabilitating.
Our Medite Smartply division consists of manufacturing mills in Clonmel, for Medite and Waterford for Smartply, which produce engineered wood-based construction panels.
The climate emergency is recognised as the greatest challenge we face as a society. There is an urgent need for Ireland to meet stretching climate action targets and the Irish forestry sector and Coillte have an important role to play. Recognising this, in April we launched a new vision for Coillte’s forests.
Rooted in science, our new vision aims to sustainably balance the multiple benefits from our forests across four strategic pillars, namely, climate, wood, nature and people. Our ambition is to create new forests, manage our existing forests for greater carbon capture and provide more habitats to protect and enhance biodiversity. We will increase the number of incredible forest recreation spaces for everyone to enjoy. We will support the creation of new homes by continuing to deliver sustainable Irish wood products that will help to decarbonise our built environment. In developing our new vision, we identified that forests can deliver benefits that support many of the 17 UN sustainable development goals. This was our framework to consider the multiple benefits of forestry and can be summarised across the four strategic pillars of climate, nature, wood and people.
We established 11 core ambitions that we propose to deliver. For climate, we aim to enable the creation of 100,000 ha of new forests by 2050, thereby supporting the delivery of the national afforestation target and creating a carbon sink of approximately 18 million tonnes of CO2; to manage our existing forest estate to capture an additional 10 million tonnes of CO2 in our forests and soils by 2050; to redesign 30,000 ha of peatland forests by 2050 through a programme of rewetting or rewilding for climate and ecological benefits; to produce sustainable wood products that can displace over 2 million tonnes of CO2 every year by not having to use carbon intensive products such as concrete and steel; and to enable the generation of an additional 1 GW of renewable wind energy by 2030, enough to power half a million homes in Ireland, via our joint venture company, FuturEnergy Ireland.
For wood, we aim to produce a sustainable supply of 25 million cu. m of Irish certified timber that can help Ireland achieve its housing ambition of 300,000 new homes by 2030; to promote the use and benefits of wood products to help increase the level of timber homes in Ireland from 20% to 80% by 2050; and to develop innovative wood products to meet the growing demand for sustainable materials to support the bio-economy.
For nature, we aim to increase the area of our forest estate to be managed primarily for nature from 20% to 30% by 2025, which is an area of over 140,000 ha; and to enhance and restore the existing biodiversity areas in our estate by carrying out nature conservation projects to improve their ecological value. For the long term, we will continue to redesign areas of our existing estate that could be managed for biodiversity, targeting that 50% of Coillte’s estate is managed primarily for nature.
For people, we aim to support the creation of 1,200 direct and indirect new jobs in rural communities to enable the just transition to a low carbon economy in Ireland and to enable the investment of €100 million to create world-class visitor destinations by 2030 to support the growth in tourism and recreation in Ireland.
We also aim to double the number of recreation areas to 500 nationally, enhancing local communities and contributing to people’s well-being. This is a vision that aims to deliver the multiple benefits from our forests to the people of Ireland. It is a very ambitious plan that will require significant investment and, therefore, it is important to note that to achieve all of this, Coillte needs to be financially strong and economically sustainable. We have made significant progress in realising our vision.
I will turn to the benefits of forests for climate. We are fully committed to supporting the delivery of Ireland’s climate action plan, which recognises the importance of forests and wood, and the positive impact they make in sequestering and storing carbon. Coillte has the capacity to increase the carbon sink by creating new forests. Conifer forests grow very well in Ireland and sequester CO2 quickly and are, therefore, a wonderful carbon sink. Broadleaves, although they grow much more slowly, and sequester CO2 more slowly, are a good long-term store of carbon. It will, therefore, be important to create new productive conifer forests and broadleaf forests in our future plans. Our partnership with the Nature Trust is creating new native woodlands across the country. It is also essential to understand how we should better manage our peatland forests. We do not create new forests in these areas today as we better understand the climate implications. Today, a proportion of these peatland forests present a carbon emission risk, which can be mitigated through forest redesign, either rewetting or rewilding, as is most appropriate to each site. Our Wild Western Peatlands project will restore and rehabilitate approximately 2,100 ha of Atlantic blanket bog and wet heath, currently planted with spruce and pine forests in Derryclare, County Galway. This project will not only restore an important habitat, but will also enable us to further develop the expertise required for the restoration and rehabilitation of western peatland forests.
I will now speak to the benefits of forests for wood. Globally, construction represents 37% of global energy related CO2 emissions. There is a sharp focus on these emissions and the embodied carbon in our buildings. Today, we understand that wood products have the lowest embodied carbon of any building material, with timber-framed buildings being 2.5 to three times more carbon efficient than traditional builds. In addition to the carbon benefits, modern methods of construction with wood are much faster and cleaner, produce less waste, require less labour and are more cost-efficient and, therefore, it is clear that wood should be used as the material of choice in construction. In November, we co-hosted our first Build with Wood: the Pathway to Net Zero conference with the Department of Agriculture, Food and the Marine, to highlight the role the forests and forest products sector can play in decarbonising the built environment and addressing our housing needs. We were also pleased to note the motion regarding wood for construction debated in the Seanad recently, and the proposal to form a working group across the Departments of Agriculture, Food and the Marine, Housing, Local Government and Heritage, and Enterprise, Trade and Employment. We believe the establishment of a cross-departmental working group is essential to facilitating an increased level of wood-based construction.
Moving on to the benefits of forests for nature, we were delighted to have participated in the recent Citizens' Assembly on Biodiversity Loss, where we talked about our ambitions to increase biodiversity across our estate. In addition to the significant increase in the area that will be managed primarily for nature, we are carrying out significant biodiversity restoration projects across the country. Projects, such as Hazelwood, County Sligo, where we are restoring an alluvial forest habitat, and in Rossacroo, County Kerry, where we are restoring roosting sites to support the lesser horseshoe bat, are good examples of the work that is under way. There are wonderful areas of biodiversity across our forest estate, and our strategic vision aims not only to enhance and restore these areas, but also to create new habitats in the long term through further diversification of our estate.
In terms of the benefits of forests for people, we were delighted in July to have President Michael D. Higgins officially open Beyond the Trees Avondale, a unique collaboration between Coillte, Fáilte Ireland and EAK Ireland. This is a great example of our ambition to build more world-class visitor destinations for everyone to enjoy. Since it opened Beyond the Trees Avondale has been recognised as Ireland’s first age-friendly tourist destination and it is notable that the treetop walk and viewing tower visitor experience is fully accessible to all. With more than 200,000 visitors since July Beyond the Trees Avondale has proven hugely popular. Coillte is now developing plans for additional outstanding visitor destinations throughout the country.
In conclusion, since April we have engaged extensively on our new vision, including stakeholder meetings, an Oireachtas day, public attitudes survey and public consultation. Independent research conducted by RED C, which analysed feedback from both the public attitudes survey and public consultation was held in summer 2022. It was positive overall regarding our new forestry strategic vision. This is encouraging. We will continue to engage with our stakeholders as we move forward, to ensure our new vision is well understood, as we seek to deliver the multiple benefits of forestry for Ireland.
Jackie Cahill (Tipperary, Fianna Fail)
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I thank Ms Hurley for her comprehensive, short, concise and precise plan for Coillte. I do not know where we are going to get the supply of land to fulfil all of the ambitions. We have unenclosed land and designated land that we cannot plant and we now have a restoration policy coming from the EU, which will also prohibit plantations on a wide variety of land that is planted at the moment. While I fully commend the strategy programme, which is ambitious, as a rural person I cannot see where we will get the supply of land to try to achieve all that we are trying to do around climate change. I call Deputy Fitzmaurice.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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I welcome Ms Hurley and thank her for her statement. There are a few issues I want to get my head around. There are 30,000 ha on basically bog or peatlands that Coillte is getting rid of. Has it sold some of that land in the past year or two?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Has any been sold to the National Parks and Wildlife Service, NPWS?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Was it sold or not?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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I thank Mr. Carlin. Is Coillte going to be rewet the 30,000 ha itself?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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What is redesign, and will Coillte be doing that itself?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Coillte will do that 30,000 ha. There are 90,000 ha as well on biodiversity out of the 440,000 ha. What is the total area for commercial timber at the moment?
Jackie Cahill (Tipperary, Fianna Fail)
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Is this the spruce now?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Is there a planting obligation on those 30,000 ha or is the Department going to let Coillte out from that?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Does Coillte not have to replant it?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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I did not quite hear Mr. Carlin. Did he say for rewilding or rewetting or replanting?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Will it be a different type of timber?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Will it be something associated with that area?
Jackie Cahill (Tipperary, Fianna Fail)
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Coillte has accepted that obligation.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Coillte will have covered itself.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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The 100,000 ha will be extra. The 30,000 ha will not be included in that?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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What is Coillte cutting each year in cubic metres or hectares?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Right. In the context of the 100,000 ha and the vision Coillte has in that regard, I was looking at the statistics relating to the amount of land sold in Ireland each year. In 2019, there was just over 29,000 acres sold. Some years before that, there were up to 60,000 acres sold. That equates to 25,000 ha or 30,000 ha. Is Coillte doing 100,000 ha?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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So it will be approximately 3,000 or 3,300 ha per year for 30 years. Coillte will be in the market for 10% of all the land that is going be sold, at best, in Ireland. I presume it is not going to be competitive in the Golden Vale, where land makes €20,000 per acre.
Jackie Cahill (Tipperary, Fianna Fail)
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The Deputy is getting very flaithiúileach.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Pardon?
Jackie Cahill (Tipperary, Fianna Fail)
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I am sorry for interrupting the Deputy.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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What I am saying, and I am being very clear on this, is that Coillte will not be able to compete with somebody who is paying €20,000 or €25,000 for land. In the areas in which Coillte will be competing for land, I presume it will be 30% to 40% of the land that is above marginal. Is it fair to say that said land is located in the west and in the midlands?
Ms Imelda Hurley:
I hear what Deputy Fitzmaurice is saying in terms of the amount of land that comes up for sale on an annual basis. Our target it will be 2,000 ha to 30,000 ha, ramping up over time. We see the acquisition of land - we do not have a land bank - as an important component of how we achieve the 100,000 ha.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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I did not ask about the importance; I understand the position in that regard. I have looked at the amount of land involved and analysed the position. Some land sells for €20,000 or €25,000 per acre. A great deal of land that is of lesser quality is to be found in the west - down as far as Kerry - the north west and the midlands. There are also parts of Tipperary and other places where the land is not of great quality. When you add the percentage in that regard and consider what Coillte is looking for, you realise that Coillte could be fighting with farmers for 25% to 30% of all the land that goes for sale. Is that fair to say?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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What percentage of the 100,000-----
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Does Mr. Carlin recognise the concern among the farming community that Coillte will maybe compete for one in every three acres in marginal areas?
Mr. Mark Carlin:
Yes. I will get to that point. I understand the nature of Deputy Fitzmaurice's question. What we are doing here is for the long term, namely, out to 2050. We could say that it is going to be 20% of 2,000 ha, which would not be not good enough. We know we need to increase planting to 8,000 ha. We need to be part of that, private forestry companies need to be part of it and farmers will have to do the lion's share of the work because they own the land. We determined that we need to get to 18% by 2050. That is the stated target, and it is beyond 8,000 ha. We need to be part of this. How are we going to be part of it? First, by looking at public lands. There is an opportunity for us to help other agencies with our expertise and the plants we have to create new woodlands on public land. There is a proportion that will have to be acquired on the open market. Our biggest challenge, in the context of our ambition, is how to acquire the land. There is no doubt about that.
On the Deputy's comment about driving land prices up, there is only a point where we can get in to get land for forestry. It is not in our interests to drive up the price of land. We have to do that very responsibly.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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There are media reports, and we need to put this to bed fairly quickly, about an English investment company and Coillte tying up together. I can comment on this story because it has appeared in the newspapers. I do not want to get the Chair into trouble.
Jackie Cahill (Tipperary, Fianna Fail)
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That would be a first.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Gresham House has been put in the can with Coillte. If there any connection whatsoever, through finance, special purpose vehicles, SPVs, or by any other means, whereby Coillte is tying up with Gresham House and whereby either entity will be drawing down grants? I am looking at a document from the Scottish Parliament, dated 10 November, in which a claim was made on that Gresham House has not been a great success story in Scotland. Is there any truth in this story? Will the witnesses comment in order that people out there will know?
Ms Imelda Hurley:
When we launched our vision, we were very clear on the ambition of 100,000 ha. We were also very clear in our engagements that there is substantial capital required in order to achieve the 100,000 ha. It will be up to €2 billion in terms of cost between now and 2050. In our engagements, we have been clear that we will need to access capital to do this. That will require two forms of funds. The first fund has already been set up, namely, the Nature Trust, the purpose of which is to deliver new afforestation in terms of native woodlands and to undertake potential nature rehabilitation. The trust will raise money by means of what we call environmental, social, and governance, ESG, or impact investors. These are investors who are not looking for what we call a traditional return and they want to make an impact in terms of what they do.
The second fund is more focused on what we would call traditional, long-term investors-----
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Who are the directors of the Nature Trust?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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What is Forestry Partners?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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There are private individuals involved.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Are they drawing down any grants in respect of the land?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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So, grants are being drawn down from the Government and Coillte is involved.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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That is for native woodland.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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How is Coillte financing commercial woodland?
Ms Imelda Hurley:
The commercial woodland will require a more traditional fund whereby one would be seeking to access long-term investors. That fund would be focused more on productive forestry. We do not have the level of capital that is needed, so we need to access capital. To answer the Deputy's specific question, I can say that we are in advanced stages of engagement in terms of that fund. However, there is a way to go. There are third parties are involved, and I am not in a position to name them at the moment.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Will the third parties that will be involved be drawing down grants, through a SPV or by any other means, when it is set up?
Ms Imelda Hurley:
The reality in terms of delivering afforestation is Ireland is that grants and premia are needed to enable that to happen. The fund will seek access to grants and premia. In the context of the engagements we are having in respect of the fund, it is pleasing and important that there is significant interest from Irish investors as well as from international investors. The scale of the challenge, not only in accessing and identifying land, as Deputy Fitzmaurice mentioned, but also in the context of the capital required to deliver the afforestation targets in the climate action plan, is significant.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Nature Partners was set up on 1 November 2021. Is that right?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Are the directors Mr. Caulfield, Mr. Feeney, Mr. Berecroft and Mr. Beckett?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Are they private investors?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Are they drawing the grants?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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The company is drawing the grants.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Someone is getting the money from the grants.
Mr. Mark Carlin:
The fund owns the land and, therefore, it draws the grant. Coillte's role in this is threefold, namely, to acquire the land, plant the land and then manage the land as part of our existing forest estate. That is our role in this. The only way Coillte can get back into delivering the afforestation goals of the country and assisting in that is by drawing on third-party capital because the level of expenditure is extraordinary, at over €2 billion.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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To put it simply, what Coillte did down through the years was it went in and planted land. It did not draw the grants; the farmers drew the grants if they were planting themselves. Coillte went in and never drew the grants. What it is doing now is tying up with private investment funds, be it through the commercial side or broad-leaved trees and native timber. Others will draw the grants but Coillte will be tied in with them. Are those the facts?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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The grants are going to be drawn, yes or no?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Coillte never drew them before.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Is Coillte going to manage these forests?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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What is the deal? Will the witnesses explain the deal in a case where a nature trust with directors to whom it is accountable buys land? Has Coillte done a lease scheme or what type of scheme is done whereby Coillte is to manage these forests? Coillte was never a manager of forests; it owned all of the forests.
Ms Imelda Hurley:
In terms of the Nature Trust and the more long-term traditional investors, we will be the forest manager. The forests will be managed under all of the open access principles of Coillte forests, so there will be availability of recreational facilities and tracks and trails. We will also be enabling the planting of those forests in the first place and the sourcing of land for that.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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The big headline that Coillte is going to buy 100,000 ha of land is pure BS? It is basically a statement coming out. Coillte is going to be the forest manager, where investment companies are going to be drawing the new grants that are coming out. Is that fair to say?
Ms Imelda Hurley:
We have said that we would enable the creation of 100,000 ha of new forests. The way we will do that, as we have outlined, is through the traditional investor and the impact investor. What is important in all of this is the scale of challenge ahead regarding afforestation, which is significant. The country needs to plant 8,000 ha per annum. There is much to go in achieving that target.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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I will tell Ms Hurley what the scale is. The scale is the small farmer in areas where private investment companies, not Coillte, will be coming in. Coillte will be running the forests and competing with those farmers while the investment companies will be drawing grants now that Coillte never drew before. That is the reality. Will the witnesses tell me-----
Jackie Cahill (Tipperary, Fianna Fail)
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Please give Ms Hurley a chance to answer.
Ms Imelda Hurley:
Regarding the scale of the challenge of meeting the 8,000 ha target, Coillte's target is to enable the creation of between 2,000 and 3,000 ha per annum. There is a role for Coillte in delivering that scale. There is also a role for forest management companies and landowners and farmers who choose to plant their land. The scale of the challenge is so significant that everybody needs to play their part. We are clear that no one will be squeezed out because there is so much to do. If anything, we need more people attracted to the sector. Capital is needed for the sector to deliver the scale of targets that are ahead.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Can Coillte not go to the EU or the investment banks? Will they not give Coillte money?
Mr. Mark Carlin:
I need to clarify something. Since Coillte was established, any afforestation that has been done has involved grants and premiums. They were provided directly to the organisation until it was deemed state aid, so it stopped. After that, we worked in partnership to get grants and premiums. This is the same way. We have been asked several times at this committee why Coillte is not facilitating the Government target of delivering afforestation. The only way we can do that is by acquiring land. We do not have any more land. For us to acquire the land involves either working with public bodies - we should not lose the focus on that important part of this - or acquiring land. For us to acquire to land, one cannot simply do afforestation in Ireland without grants and premiums. There has to be a mechanism to do that. The Deputy says it is just 100,000 ha and we are not actually involved. We have a key involvement in it, and that is a positive thing-----
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Coillte is a manager.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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If I am the manager of a hotel, I do not own the hotel, to be clear. I manage it and I run it.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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I was reading Coillte's financial statement. What is Nature Partners? Is it a company?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Why does Coillte have no shares in that?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Coillte has stated it has no shares in it or no holding in it.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Does that entail buying land as well?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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To summarise, what I can see happening is, due to the 30,000 ha Coillte will be rewetting, there will be a battle around the country for land. Coillte now has investment companies coming in that ordinary farmers will not be able to compete with. It is a sad day for those with average land in rural Ireland. Farmers who are trying to survive on it will not be able to do so because they will have investment companies looking at 30 or 40 years of investment and Coillte will be managing it. That is a far cry from where Coillte was when I was a young lad.
Jackie Cahill (Tipperary, Fianna Fail)
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I call Senator Boyhan.
Victor Boyhan (Independent)
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It will be brief and sweet. Looking at the monitor, I would say there will be a vote in the Dáil shortly. I thank Ms Hurley and Mr. Carlin for their comprehensive presentation and the clarity of their message. Clearly, they are enthused and keen to get on with the job. We are all conscious that Coillte deals with planting, growing, protecting, managing, harvesting and replanting forestry, which is critically important. Will the witnesses share their view of the licensing system and the various stages in it? As the witnesses said, Coillte has about 50% of forestry and the rest is made up of smaller entities and the private sector. Coillte will be familiar with an organisation called the Social, Economic, Environmental Forestry Association, SEEFA, which has been before the committee. There is a view that the Department treats Coillte more favourably. We have seen the statistics on licensing and so on and the way licensing applications are processed and dealt with. I do not know if that is a reflection on how the applications are prepared. I will not make that call because I simply do not know. Will the witnesses touch on the functioning of the licensing system and how it can be improved?
Jackie Cahill (Tipperary, Fianna Fail)
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The Vice Chairman, Senator Lombard, will take the Chair while Deputies leave to vote in the Dáil. Senator Boyhan may continue.
Ms Imelda Hurley:
A regulatory review has been undertaken by Philip Lee, an independent third party. That review has been submitted to Project Woodland and the Department. As the review is considered in terms of the specific opportunities for change, it is important that the overall licensing processes and systems are streamlined to the fullest extent possible while always fully adhering to the EU legislation and all the regulations that must be followed. That work is ongoing. We welcome all the work that has been done to date and look forward to the outcome of that regulatory review which will bring certainty to the licensing system going forward.
Victor Boyhan (Independent)
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Are there any simple takeaways Ms Hurley would like to leave with us as a committee that will be making recommendations?
Mr. Mark Carlin:
The committee has heard a significant amount on licensing in the past couple of years. As a forestry company, it has been very useful to have that debate because it has been a difficult period. It must be recognised that the backlog has reduced significantly. That has been very positive. Coillte has been able to run its annual contract sales event in recent weeks, which is significant. It is 50% of the supply from Coillte to the industry and it is the backbone for small contractors and sawmills across the country. There has been significant and positive moves forward. There are still difficulties, particularly with afforestation and roads. There are still issues within the system and the industry is well aware of them. It has been recognised within Project Woodland as well. It commissioned the Philip Lee report. The key is that even though the backlog is reduced, it is still a very onerous system. Everyone recognises it is too onerous. The aim of the review is to make it more streamlined.
There are certain areas where streamlining can be achieved. This goes to the core of the Senator's question. First, the big thing to look at is the conditions that are coming out in some of the licences. There is a need to standardise that into standard practices so that every time a licence comes out, whether it is for afforestation or felling, there are not specific conditions but, rather, more general conditions to which one should adhere which should be standardised. They can be accounted for within the screening process. That is one of the most significant things that could be done. A second point is that we are licensing every activity. If you plant, put in road, thin five times and clear fell, it is a licence all the way along. There is an opportunity to look at this as a project.
Victor Boyhan (Independent)
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A one licence cycle.
Mr. Mark Carlin:
There could certainly be one licence for the phases. There could be a phase of a licence for afforestation and putting in a road. There could be a phase of licensing for thinning. The thinning is not going to change, so one can get a licence to cover that period. There could also be a licence to cover the clear fell and reforestation period. We need to approach it much more holistically in terms of projects. One of the other significant challenges with which we have to deal is wind blow and pest. We have to make sure that whatever regulation we have at the other end, we can respond very quickly. Some other European countries have not been able to respond in that regard. We need to make sure that when the regulations are streamlined, they are able to deal with some of those events.
The Senator also asked a question on a perceived bias-----
Victor Boyhan (Independent)
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Bias between the sectors.
Mr. Mark Carlin:
Coillte is not held to a different standard from private forest owners. We have to get through the same standard in terms of a licence, appropriate assessments and screening. That is an important point. There is a perception in the context of Coillte holding 50% of forests but it is more in terms of the supply chain because our forests are older. At the moment, we are currently at 70% to 75% of the supply, approximately. At this stage of the evolution of Irish forestry, one would expect Coillte to have more licensing need, so more licences come over to Coillte. One of the other big things to recognise is that we are running a complex supply chain. We need to have certainty right now that everything is licensed for 2023 so that we can bring it to the customers. It is a significant amount of volume and we need to bring that certainty. That is important. It is not a bias; it is more a perception in terms of the numbers and how we conduct our business.
Victor Boyhan (Independent)
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Pushing on, the witnesses mentioned Beyond the Trees at Avondale. I have been there many times. It is fantastic. It is sad that we no longer have a forestry school in Avondale. I do not know what the future plans of Coillte are in that regard but I want to tip on in terms of education and forestry training. At the higher end there is the degree and all that, while further down there is great potential for apprenticeships. Coillte has done a bit of work on that but a hell of a lot more could be done. Coillte has the forestry side, the nurseries bit and the silviculture bit but there is a real opportunity. This is also about selling a message. Coillte has really sharpened up on its corporate messages in recent years. That is clear to see from its website, which I looked at today. It is fantastic and sets things out really well. I ask the witnesses to touch on Coillte's forestry training, its plans and how that will fit in regionally. Are there plans to open a forestry school? I know it has become an academic degree course but there is a need at all levels. A person does not need a degree in forestry to be a good and practical forester. There is need all the way through. I ask the witnesses to take us through the plans at the various entry points for forestry in terms of Coillte's commitment to forestry education.
Ms Imelda Hurley:
Absolutely. I will pass to Mr. Carlin in a moment because he is a forester who has been through the system and can add more colour. I will address this in overall terms and in the context of the earlier discussion on the scale of challenges that are ahead. I appreciate the Senator's comments on Coillte having improved its corporate messaging. We see that as a very important role not just for Coillte, but for the overall forestry sector. We recognise the importance of the sector and of helping everyone understand that the sector, perhaps traditionally thought of as being primarily for wood production, delivers so much. We focus today on the multiple benefits of forestry. Everything we do relates to balance. That is very much what our vision is about. We want to ensure people understand that forests can deliver for climate and carbon, for nature and biodiversity, for people, well-being and recreation, and for wood. That is an important piece of how we think about the overall sector and we see the important role we can play in that regard.
The second piece, which very much builds on the question asked by the Senator and the response to it, is that we recognise there are real challenges for our sector in terms of attracting labour. This issue is particularly relevant at present in terms of the challenges of our time. There are significant challenges ahead with regard to the amount of work that needs to be done. We have spoken today about rewetting, rewilding and afforestation. There is a significant amount to be done. Our focus in overall terms is to help people to see that forestry as an overall sector and the wood processing industry can be very attractive. We are more focused than ever before on science, technology, engineering and mathematics, STEM, ecology and all the enablers of forestry in addition to the traditional forest manager. This week, we had our most recent conversation on the challenge of attracting people to the sector, and the need to do so. We recognise that university is not the only answer in terms of education, and that apprenticeships can be a significant way forward in addition to graduate programmes and so on. I will pass over to Mr. Carlin to address the detail of what we are doing specifically in the forestry area to address the challenges the Senator identified.
Mr. Mark Carlin:
To build on that, forestry has never been more important, and we recognise that. There is a wonderful opportunity to create new jobs in the sector, the green tech sector, and to support rural jobs. The first thing is careers in forestry. There are very few foresters. I agree with the Senator that not everyone needs to be a forester. However, we still need technical professional foresters. We do not have enough of them. In addition, there is poor gender diversity and general diversity. We need to consider branding, no more than Coillte, in terms of forestry and what the sector could provide in terms of skills to attract new people into forestry as a career. We also have to develop apprenticeship schemes. Coillte will be working on this within the sector. It is a sectoral problem. Apprenticeship schemes are a way of getting kids who do not want to go on to third level education but want a successful career in forestry involved. We have to open that avenue up again. We used to be better at it. We used to tap into the agricultural fraternity - people who wanted to stay at home on a farm and take care of the land - a lot better. Forestry was a very good thing to work at as well. There are wonderful opportunities to tap back into that.
I agree fully that there are opportunities here both for professional careers and also apprenticeships. Skills and training will be key in the future.
Victor Boyhan (Independent)
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Forestry is one of the only natural resource sectors without a development agency. Some would say that Coillte is a sort-of development agency. I know how people might be confused at that, but Coillte is not the development agency for forestry. We do not have a forestry development agency which is extraordinary for such a land mass and such a resource which has potential for further massive expansion. I would like to hear the Ms Hurley's views on a national forestry development agency.
Ms Imelda Hurley:
In Coillte we always talk about developing a strategy before a structure. The Department of Agriculture, Food and Marine through Project Woodland has the overall forestry vision and strategy which has come in part through the forestry programme and there is also the broader piece. As that strategy is worked through, we believe the appropriate structure should be considered and any structures that will support the development of forestry in Ireland would no doubt be welcomed. We believe the first focus should be on the strategy and ensuring strategy is appropriate and, from there, determining the most appropriate structures.
Victor Boyhan (Independent)
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Does Ms Hurley have a particular view about a national forestry development agency? Does she see merit in it?
Ms Imelda Hurley:
As somebody who has joined the sector in recent years, the sector has enormous relevance to Ireland's future for all the reasons we have already articulated in our opening statement. It is important to promote forestry in whatever way is considered most appropriate. People need to better understand the forestry sector. There is not a culture of forestry in this country. I am a dairy farmer's daughter and so I know that forestry needs to become more - I will say it - actually acceptable in many instances. Forestry is important in delivering wood and decarbonising the built environment. There are so many different aspects that need to be delivered. The key is that each area is focused on and each area is delivered on.
One of the key areas that needs focus and delivery, ideally in the near term, relates to the changes to provide for building with wood. We very much welcome the suggestion of a working group to include the Departments of Enterprise, Trade and Employment; Housing, Local Government and Heritage; and Agriculture, Food and Marine. Having identified the critical need for such a strategy for Ireland, setting up this working group is a great example of what is needed to promote that. It is a good example of needing to promote, identifying the strategy and then figuring out the structure. I invite Mr. Carlin to add to that if he wishes.
Mr. Mark Carlin:
It is important to recognise that the timber sector is working with the Department of Agriculture, Food and Marine to explore options. Three things are needed for this industry to kick on. The first is research and development. The second is innovation, particularly product development. The third is skills and training which we just discussed. Those are three critical enablers for the industry to realise its potential. Supply will double in the next ten to 15 years. Forests are needed for climate, for nature and for wood for people. It is needed for all these wonderful things. It is now time to look at the investment within sector to step up the professionalism and provide cross-sector collaboration in the key areas of research, product development and skills training.
Victor Boyhan (Independent)
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I am very impressed by today's presentation. I have followed Coillte for a long time. I studied horticulture. I am quite impressed by its website which I looked at earlier. Ms Hurley and Mr. Carlin are wonderful ambassadors for their sector. Coillte is in a good place with people like them in leadership positions. The Chairman is not here at the moment. With a committee that deals with agriculture, food and the marine it is always helpful to get outside the bubble of Leinster House occasionally and we should do so sometime next year. I have been to a forest in Glencullen where there is a very impressive cycle way and adventure trail. Such things develop for Coillte the allies it needs. I wish Coillte well with its work. Sometime in the new year perhaps in the spring it would be great to go on-site to meet some Coillte staff and see some of its forestry projects. I wish Ms Hurley and Mr. Carlin well and thank them for appearing before the committee.
Tim Lombard (Fine Gael)
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I think it a good idea that we should do that visit at some stage. In the absence of any other members, I will ask my questions. I compliment Ms Hurley on her very comprehensive opening statement. I read it this afternoon and I thought it covered nearly everything I was looking to find. While I do not want to put her on the spot, the annual dividend payable to the State was not mentioned in her opening statement. In previous contributions she mentioned that financial considerations limit how Coillte might expand to some degree. I understand that Coillte paid a €30 million dividend to the State last year. I am not sure how much it was in previous years. Given Coillte's financial issues and the need for the Department to move forward so that it can achieve its really challenging goals, is it appropriate that the State should be looking for a €30 million dividend? Surely that is counterproductive. Ms Hurley went into detail about the other two Departments Coillte is working with. I fully understand the financial issues Coillte has trying to build capital to purchase land. On the other side of that, it is paying a dividend to the State. I ask Ms Hurley to elaborate on what the dividend is. Given the state of the markets, I presume Coillte has had a good year this year. Given the comprehensive vision Ms Hurley has outlined, does she believe paying a dividend to the State of in excess of €30 million is appropriate for her organisation?
Ms Imelda Hurley:
I am very happy to respond to that point. The Vice Chairman is correct in that figure of €30 million for the dividend in 2021. This year we have had a very solid year. I would use the term strong in terms of the previous year for a moment. There was a strong start to the year. We are having a significant challenge at this stage with timber pricing reducing somewhat. Demand is also going down, as many consumers are dealing with the cost-of-living challenges and pulling back. We are also seeing an increase in costs. We believe that next year will be a challenging year. Our dividend in any year is determined on the basis of a payout ratio that runs to between 20% and 30% of what is called normalised profits. Effectively, the €30 million was a calculation based on the 2021 results. In 2020 our dividend was €2.3 million. It was very much lower on the back of that year being impacted by Covid and some licensing challenges at the time.
Coillte delivers financial dividends and it delivers social dividends. Over the evolution of Coillte for much of the time, perhaps the focus was, in many ways understandably, on financial dividends. I believe there is now a broader understanding of the social dividends and societal expectations. There is also more understanding of the science of what Coillte can deliver. Today we are talking about the multiple benefits of forestry in a way that we did not speak about a number of years ago. Today it is about climate, nature, wood and people. We believe it is very important for us to deliver the social dividends and also that we maintain a very strong successful and financially viable Coillte which is in a position to deliver financial dividend. On an annual basis, that is considered by the board and we engage with our shareholders.
As we look forward, we are always happy to have that engagement and to articulate not only the financial dividend but the social dividend that we are also delivering.
Tim Lombard (Fine Gael)
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On the core point, the wonderful plan Coillte has laid out for the next 20 years, would the €30 million dividend to the State be better spent if Coillte reinvested it in the product it is proposing? Coillte's statement was amazing and contains great aspiration but finance is key. Paying €30 million to the State is questionable, to say the least.
Ms Imelda Hurley:
Our current dividend policy, which we review on an annual basis and ensure we comply with, is 20% to 30%. We are cognisant of the scale of capital required to deliver our vision and will be engaging, as we always do, with our shareholders regarding the different options and opportunities available for funding.
Tim Lombard (Fine Gael)
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Who sets that dividend policy? Is it set by the Department or Coillte? Where does that policy come from?
Ms Imelda Hurley:
It is considered by the board and shareholder. It is an engagement that involves the board of Coillte and shareholder. We are cognisant of the cost of the vision going forward and focused on ensuring first and foremost that we are financially viable and sustainable. That is the best way we can deliver our vision. Regarding the point the Vice Chairman made about the sources of capital, of course one additional source of capital could be the dividend used in another way. As we go forward, we will look at how we deliver this vision, where we can access and raise capital and how we could transparently, for instance, deploy capital in the event that there was a discussion around dividend. I reiterate the importance of Coillte remaining financially strong to deliver the vision. We should welcome the fact that in overall terms there is this financial dividend. There are always conversations that can be had regarding how many may be deployed going forward.
Tim Lombard (Fine Gael)
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There was a debate in the Seanad about the 300,000 new homes that are proposed to be built with timber. Coillte mentioned this in its statement. Senator Boyhan and others were involved in that debate, as was I. As regards building materials, the focus must move away from traditional steel and concrete to match the potential of timber. Supply will be key to making sure that there is good quality timber going forward. Does Coillte have projections of the amount of timber in hectares that needs to be planted in the next decade to reach that potential? This issue was mentioned in the Seanad debate in that the statistics required seem to be absent in this case. We all realise we need to reach the 300,000 unit, or 80% of housing output, target but for that to happen planting will be needed in the next decade. We need to get that figure because it was obvious during the debate that it was absent. Will Coillte give some insight into what it believes that figure should be over this decade?
Mr. Mark Carlin:
We are probably some way off the bite point of that kicking in, which is why there has not been an exhaustive amount of work done. I will explain why. We are going to double supply in Ireland in the next ten to 15 years thanks to all of the afforestation successfully carried out in the 1980s, 1990s and early 2000s. We also export 30% to 40% of our product. If I bring those two factors together, that would not lead me to be concerned about supply.
Mr. Mark Carlin:
We do and will probably continue to need to import some niche products we cannot be self-sufficient in. When we say we are an exporter, we are a net exporter, which means we export more than we import. We should strive for self-sufficiency. There is enough supply from the trees that are in the ground and growing, in addition to the potential to bring in timber that has been exported and use it in Ireland. I still agree with the Vice Chairman that our future forests must have wood-producing capability. That is part of our strategy. Of our new forests, some 100,000 ha, or 50%, will be primarily for wood production. That is critical going forward because there are areas of our estate that were originally grown for wood and now need a redesign in emphasis.
The key point from a climate perspective is that we need to build more with wood. There are significant advantages to that. Timber houses are two and a half to three times more efficient. They are also faster to build, require less labour and generate less waste. There are significant advantages to building with wood. Some things we need to do to realise that include the right regulations, which do not limit building with wood; demonstration buildings built from engineered wood products or timber frame; and green public procurement to make sure we are meeting the potential to use wood more in the built environment. We must be cognisant of supply going forward but we must take the opportunity now as regards using more wood.
Tim Lombard (Fine Gael)
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As much as Coillte purchases land, what is the process in the event that Coillte is selling or disposing of parcels of land for amenity or other purposes? There is a particular case in Riverstick in County Cork where a piece of land is being sold by Coillte. I think it is a 22-ha site but I may be wrong. Will Coillte speak about the process of consultation with the local community when it is disposing of a property? The disposal of this piece of property in Riverstick has created an unfortunate backlash towards Coillte due to lack of consultation and understanding. There have been several meetings locally about the issue. Has Coillte looked at the policy of how it disposes of property and the means of involving the local community? In this scenario, a sign went up, rumours spread and nobody was quite sure what was going to happen. Will Coillte give the committee an insight into what is happening in that case, if the witnesses are aware of it? What is its policy on the disposal of properties? How does Coillte involve the community?
Ms Imelda Hurley:
That sale is on pause and continues to be on pause while there is ongoing engagement with the local community. I acknowledge that during the Covid-19 pandemic, engagement with local communities was more difficult. In some instances an information vacuum perhaps developed. We are engaged with the local community in that specific instance. The most recent update was that a trails officer entirely independent of Coillte reviewed the local community or residents' group's proposal and considered if there were alternative options. As regards the local community, a county walkway is being developed and we are engaged on that and working it through. That is where that case is at this time.
Regarding process, there are times when we dispose of a piece of land. We are often approached in relation to a request. We will review that and have reviewed in detail our processes regarding land sales, particularly as we are now able to go back out and re-engage with the public. The lands are usually advertised and where there may be a local concern, we now work to ensure we meet the local community or people in the area along with the purchaser so that people are clear on what the proposal is.
Paul Kehoe (Wexford, Fine Gael)
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I thank the Chairman. I welcome the witnesses from Coillte and thank them for their opening statement. I want to venture a little more - pardon the pun - into what Deputy Fitzmaurice was saying regarding the joint venture with Gresham House. Where did it originate?
Ms Imelda Hurley:
For clarity, when we launched our vision, we were clear regarding the afforestation ambition we had and that capital would need to be raised. In our engagements, we have been clear that we need to work with and engage a fund manager concerning the raising of that capital.
Capital would need to be raised. In our engagements we have been clear that we would need to engage a fund manager to support the raising of that capital. We are in the advanced stages of discussions regarding that engagement but I am not in a position, because it involves a third party or parties in the raising of investment, to say what that party is.
Regarding the broader question as to why Coillte needs to access capital and use a fund manager, the reality is that the scale of capital needed runs close to €2 billion. Coillte does not have that level of resource available to it. The level of capital required is very significant and we are looking to deliver a scale afforestation solution and to deploy capital at scale. Long-term investors are needed and we are very pleased that there is significant interest by Irish investors. Forestry by its nature is very long term and we are, therefore, looking at a long-term investor class. As an example, it could be pension funds. That is the model required to raise the capital to deploy it to deliver the 100,000 ha of new forests.
Paul Kehoe (Wexford, Fine Gael)
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Am I right in saying that Coillte does not draw down any grant premiums?
Ms Imelda Hurley:
At this time, Coillte does not draw any grants or premiums. In the 1990s for a period, Coillte was accessing grants and premiums but ultimately it was determined that Coillte would not be accessing them. At that time, Coillte suspended engaging in afforestation. At that time also, it was notable that there was a very high level of private planting being undertaken. Now that the level of afforestation the State is seeking to achieve is so significant, Coillte sees that it has a role to play in bringing the skills and expertise to play our part in delivering afforestation for Ireland. Coillte's job is to manage the State forests on behalf of the people of Ireland and our vision is to enable a sustainable future and to contribute to Ireland's climate action initiatives.
Paul Kehoe (Wexford, Fine Gael)
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I presume this joint venture will be used as a vehicle to draw down funding and premiums because Coillte is looking for people to invest. Has Coillte spoken to the Department of Agriculture, Food and the Marine about this joint venture? In the past, Coillte would not have drawn premiums but now that it will be involved in a joint venture, it will be drawing down funding in the future.
Ms Imelda Hurley:
The reality for Coillte is that grants and premiums are needed as part of delivering afforestation. We are in ongoing communication with our shareholder on a wide variety of matters. It is aware of our ambition regarding the delivery of the 100,000 ha of new forests. It is also aware that we need to access capital to do so and that Coillte does not have the level of capital that would be required to deliver the ambition we have.
Paul Kehoe (Wexford, Fine Gael)
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Has Coillte spoken to the Department about this joint venture?
Paul Kehoe (Wexford, Fine Gael)
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Has Coillte spoken to the Department of Agriculture, Food and the Marine?
Ms Imelda Hurley:
Pardon me. I have said we have kept the shareholder up to date when perhaps I should have referred to the Department of Agriculture, Food and the Marine. We have kept the Department up to date regarding our vision and the need to access capital. The Department is aware that Coillte does not have the capital that is required in order to deliver. If Coillte is raising capital, a fund manager is needed because of the licences and all of the governance that are required.
Paul Kehoe (Wexford, Fine Gael)
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I feel there will be an issue with Coillte's very adventurous strategy programme, as the Chairman described it. Securing land for both Coillte and the private sector will be a challenge. As a State company which will be in competition with private companies, Coillte will have a lot of money to throw at this. How will Coillte be different from the private forester?
Mr. Mark Carlin:
I agree fully with the challenge that has been articulated. For us to deliver on afforestation, the biggest challenge is land. The number one way of doing this is with the largest landowners, the farmers, and putting the right environment in place to facilitate farmers to plant their land, if that is what they wish to do. That is incredibly important. We have been asked several times what Coillte is doing about afforestation, including at meetings of this committee. We have considered that. We do not have land so we have to get some. We can work with other public entities and look at public land. We are doing so by talking to local authorities and other agencies. An element of land needs to be acquired on the open market and we are going to have to do that responsibly. We think Coillte's involvement in afforestation needs to be about 20% of the total. That is, we believe, the appropriate level but we are open for feedback on that as well. If people want us to step up further and do more afforestation, that is fine. If the private sector kicks off and farming gets involved again, there will be less of an onus on Coillte. At the moment, we are doing 2,000 ha per annum. We need to do 8,000 minimum and maybe more than that. It is important, therefore, that the State forester gets back into doing this.
Afforestation cannot be done without access to grants and premiums. We have never done so. When we have been asked here why Coillte is not doing afforestation, the number one reason we have given has been a lack of grants and premiums. For this reason, we have to have a vehicle that can do this. The beauty of having two funds, one commercial and one non-commercial, is that it allows Coillte to acquire land appropriately and responsibly in areas near our existing forest estate. We can then determine what the best use of that land is. It could be for biodiversity in nature. If it is, then that will be a role for Nature Trust. If it is for wood production, it will be for the commercial fund to do it. We think this is a very good model to deliver a blended approach for afforestation in a mix of productive forests and forests for nature. It has to be able to attract grants and premiums and we have to be able to attract private capital. The scale of the climate change challenge ahead of us is huge. We need to plant more trees and the State forester needs to be involved again. This is the only way we can get back involved in afforestation.
Paul Kehoe (Wexford, Fine Gael)
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As Mr. Carlin knows, getting qualified foresters is a major challenge. Will Coillte take on additional staff if this goes according to plan? From where does Mr. Carlin envisage getting additional foresters given the scarcity of qualified foresters?
Mr. Mark Carlin:
As part of realising this vision, there will be huge opportunities for us to create new roles, jobs and skills. There are many traditional skills that we have in operating the wood supply chain and planting trees. New skills will be required, particularly when it comes to peatland redesign and some of the nature restoration projects. There will be a need for new foresters and many different skill sets across the organisation and the sector. In one way, that is very positive but it is also a challenge because we need to attract people into forestry. We need to attract more foresters and ecologists into the sector. We also need to attract more labour, specifically machine operators and truck drivers. We are very well set up in Ireland.
Our supply will double in the next ten or 15 years. We have a wonderful opportunity to build more with wood. The sector has never been more important. One of the challenges will be to ensure we have the skills and people coming into the sector and we must work together on that. We must collaborate across the sector to ensure the skills training and career opportunities are put in place so we can realise this vision.
Paul Kehoe (Wexford, Fine Gael)
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When does Mr. Carlin envisage Coillte will unveil or launch this joint venture or when will it get it over the line?
Ms Imelda Hurley:
In overall terms we are at the late stages of engagement but it involves third parties so it is difficult to be definitive on the timing. However, as I said, we are at the late stages of engagement and what is important is that there is significant interest from Irish investors. We will provide an update as soon as we can.
Paul Kehoe (Wexford, Fine Gael)
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Will Coillte come before the committee to update it?
Paul Kehoe (Wexford, Fine Gael)
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What percentage of Coillte's forestry land holding has gone towards preservation and biodiversity for tourism and such uses?
Ms Imelda Hurley:
Some 20% of our estate is managed with nature and biodiversity as the primary objective. I will come to specifics around recreation, but the context is important. Our short-term target is to increase that to 30% and our long-term target is to increase it to 50%. However, it is also important to say, that the "other 50%" - if I can use that term for a moment - of the estate will also support nature and biodiversity. It is a question of what the primary objective of each forest is.
On recreation areas, we have 12 forest parks today, including "beyond the trees" at Avondale Forest Park that was mentioned earlier. We also have approximately 260 recreation forests today and our target is to double that and increase it to approximately 500. We will work towards that in the next few years. We have 3,000 km of way-marked trails, throughout the country with the result that the overall estate is open access. People are welcome to visit the estate. We ask them to observe the health and safety measures in place when forestry activities are ongoing. The whole estate is available for people to visit, although there are areas people are more likely to visit such as the forest parks and recreation areas.
Paul Kehoe (Wexford, Fine Gael)
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I commend Coillte on the forest trails, recreation and biodiversity part of it. Praise is 100% due because the organisation has put significant investment into it.
On the felling of trees, Coillte supplies the retail sector for woodchip, timber cutting and so on. Will it continue sales to both large and small providers?
Paul Kehoe (Wexford, Fine Gael)
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I am referring to timber Coillte has felled in the forestries. Some of it is sent to timber milling companies, more to woodchip companies and other companies that turn it into fire logs for burning fuel for domestic use in residential houses.
Mr. Mark Carlin:
We adopt a cascading policy of forest products. We look at the higher value or longer life products so we service construction first and then we look at fencing, pallets and lifestyle products. The top of the tree is used as chips for medium density fibreboard, MDF, which goes into furniture and oriented strand board, OSB, which also goes into construction. The residue is generally used on-site for energy and electricity, if possible, and an element is left in the forest for fire wood or energy wood. I think that is the nature of the question. We try to optimise the other products first and what is left over is used for energy wood.
Paul Kehoe (Wexford, Fine Gael)
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I understand that.
Mr. Mark Carlin:
We have unprecedented demand at the moment for energy wood as one would expect with the cost of energy. We could not hope to meet the demand so we are trying to service our longer-term customers who have larger contracts, but if there are opportunities to help smaller operators, we are taking those opportunities. As I am sure the Deputy can imagine, it is difficult to meet the demand at the moment.
Paul Kehoe (Wexford, Fine Gael)
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In the past Coillte sold off some of the small forestry land holdings of less than 5 or 10 acres. Is Coillte selling sites at the moment or holding on to them? What is the general policy?
Ms Imelda Hurley:
As a general policy, if we are approached by someone looking for a site or a particular property, we will review it under a number of lenses and determine whether it is a piece of land we would consider selling. It is important to recognise that in any instance where Coillte sells forestry, there must be a reason for it and we always purchase land and afforest it or acquire forests to ensure the overall size of the Coillte estate is never reduced. It is perhaps important to give context that when Coillte was formed in 1989, approximately 396,000 ha of forests and lands were under management and today it is approximately 440,000 ha. That will give the committee a sense of the trajectory of travel. It is critical that the size of the estate is not reduced and, therefore, in any instance when forestry is sold, we mitigate. That is the word we use.
Paul Kehoe (Wexford, Fine Gael)
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On the recreation side and with respect to trails, are there any counties where Coillte is not happy with the percentage of forest trails that are in place? I presume it depends on the population of the forestry land in a county. Is Coillte targeting specific counties to increase the percentage of forest trails?
Mr. Mark Carlin:
We are fortunate as we have 6,000 forest properties throughout the country. We are well-established in most areas and we have a good dispersal of recreation sites. The 260 recreation sites, 12 forest parks and 3,000 km of way-marked trails are fairly well dispersed around the country. We intend to double our recreation offering and one of the things we will do is assess where we need to bring additional recreation sites. During the Covid-19 pandemic it was clear to us - with a tripling of visitors to our forests and subsequent to the restrictions easing, the visitor numbers have remained high - that people have come into contact with our forests again and it is especially important to take advantage of forests close to towns and villages to build out further recreation in those areas. We will do that assessment in the next months and year to understand where is the best place to go with additional recreation.
Martin Browne (Tipperary, Sinn Fein)
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I welcome the witnesses. Most issues have been covered. A year and a half ago, Coillte were before the committee and stated they had planted 600 saplings of the strains that were ash dieback resistant-----
Jackie Cahill (Tipperary, Fianna Fail)
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Will the Deputy use earphones as he is not very clear?
Martin Browne (Tipperary, Sinn Fein)
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Is that better?
Jackie Cahill (Tipperary, Fianna Fail)
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Yes.
Martin Browne (Tipperary, Sinn Fein)
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When Coillte was before the committee a few years ago it told us about 600 saplings of strains resistant to ash dieback and the target was to plant 3,000 in two years. In those two years, how has it fared?
How close is it to being proved a success? Will it be capable of replacing our traditional ash plants?
Mr. Mark Carlin:
This is very important for us all in terms of ash and what happens next. Clearly we have a challenge on our own estate. Probably 3% or 4% of our trees are ash, and we have had to carry out sanitation and further mitigation as well. We have also been working with Teagasc and the Department of Agriculture, Food and the Marine on identifying ash dieback-resistant provenances. We have 200 clones that are planted out. It is looking promising at the moment. We planted them deliberately in areas of high infection. Some of those are from Europe. Some are Irish, from Donaghadee, Curragh Chase and Fermanagh. We have identified trees that look resistant. We need to continue monitoring that. The next step will be to create seed orchards from those clones, to harvest the seed, and to start propagating those to get ash back into our forests. However, we need to step through those processes first. We are unfortunately still some years away from that, but we are working as quickly as we can to identify hardy provenances.
Martin Browne (Tipperary, Sinn Fein)
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Is there any indication at this stage that it is going to be of a good enough quality to replace what we have lost?
Mr. Mark Carlin:
From the point of view of the quality of an ash plant, I think it should be. That will be part of the assessment in terms of provenance. It will be looking for resistance to ash dieback, but it will also be looking for good quality so that when we create seed orchards it will be effective not only in terms of ash dieback but also in terms of meeting the need for ash, particularly from a social point of view.
Martin Browne (Tipperary, Sinn Fein)
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I will come back to what Deputy Fitzmaurice brought up earlier. We know the pressure was on for Coillte to provide more, but bringing in investment funds is the wrong way to go, in my opinion. That is driving out small farmers and small foresters, which I believe is counterproductive. I know Coillte is saying it is not involved in the drawdown of grants, but this kind of partnership is definitely putting foresters and small farmers at a disadvantage. These investment funds, or vulture funds, have deep pockets. The prices they are able to pay for land could put people out of business. As the Chairman said at the outset, competition for scarce land will drive up the price of land. Gresham House is a UK business, which means - make no mistake about it - that every penny it makes will leave this country. That is no advantage to our sector here or anything else. I do not know how Coillte is going to address it. It is also involved with the Nature Trust, which is another investment fund. Axa is another company that is involved here. Do they draw down the forest premium? Have they given any indication of how much land they intend to purchase? There are concerns around the country that in certain areas, land seems to have gone up by 10% or 20% and that this will start rising as land becomes more scarce. I am not the only who has heard that; the whole committee will have heard it. These vulture funds have the money. It is going to be counterproductive. If something is not done, we are going to start driving out the small farmers and small foresters, whom we depend on and need. Was that taken into consideration either by Coillte or the shareholders, as the Department keeps being called, when these operations were allowed to take place?
Martin Browne (Tipperary, Sinn Fein)
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I am sorry, but this additionality will come from vulture funds and drive away the people this country has depended on for the last 20 to 50 years. Why are the additionalities coming from the big investment companies who are taking the profits back to England? The people this country has depended on are being squeezed out and will be squeezed out because they will not be able to compete with the prices these crowds will pay for land.
Mr. Mark Carlin:
I understand the point the Deputy is making, and I want to try to address it. He has asked if we have considered this. We have considered very carefully how Coillte can get back into afforestation. This is meant to be additional. It is not meant to squeeze farmers. Farmers are absolutely going to have to carry the lion's share here in terms of afforestation. They are the largest landowners, and the environment has to be encouraged back into forestry. We will continue to work with the other forest companies on this. It is the case that where land has been acquired, the planting of these crops can be carried out with forestry companies too, so we hope that a rising tide will life all boats. When it comes to the type of fund, it is important to understand that these are institutional long-term investors. They have to be the right investor to be in this model.
It is not in our interest to drive land prices up, as land is the very thing we are trying to acquire. We are already buying land and we will continue to do that very responsibly. The big question is what percentage of afforestation we should be involved in. We have stated our ambition that it should be in and around 20%. We are open to feedback on whether we need to step up further to meet the national target. It is critically important to understand the scale of the challenge to get to 8,000 ha and beyond every year. We have been asked several times what we are doing about that. For the State forester to get back involved in this is the best vehicle. I understand the concerns that have been raised and that is something we are going to have to consider and monitor very carefully.
Martin Browne (Tipperary, Sinn Fein)
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Let me assure the witnesses that the only interest of investment or vulture funds is profit. They are not worried about the additional sources we need in this country. I will leave it at that. The question has been asked. However, I can assure our guests that we will be back in a couple of years' time when we have a shortage of local foresters and small farmers who have been driven out of it. That is what will happen; I guarantee it. Have those involved given any indication of how much land they intend to purchase to reach the Coillte targets?
Ms Imelda Hurley:
In overall terms, our ambition is to create or enable the creation of 100,000 ha of new forests. We are engaged and will continue to engage in any public lands that would be available as part of delivering that. We are in the early stages of engagement in those terms. It is a 30-year target, so it will build up over time.
I want to add two specific things to the earlier point. We are seeking and seeing a very significant appetite from Irish investors to enable capital to deliver. We are also seeing interest internationally, but it is important to say that we are seeing Irish interest. The other point I will make is about the funds. The Nature Trust is entirely set up with a view to delivering native woodland. It is not a financial return. It is a not-for-profit fund, and it is purely focused on that. There was mention earlier that two of the contributors are Axa and Aviva. In both instances, there is no financial return back to Axa or Aviva. The money has been contributed for ESG and sustainability purposes, purely to create new forests and deliver afforestation in Ireland.
Martin Browne (Tipperary, Sinn Fein)
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Is Ms Hurley saying that there is another 100,000 ha required, or that they need to get to 100,000 ha?
Martin Browne (Tipperary, Sinn Fein)
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Where are they now in terms of that 100,000 ha?
Ms Imelda Hurley:
We are literally at the point where we announced our vision in April. We have been consulting very widely in terms of that vision, and will continue to consult and engage. We are at the late stages in terms of the fund, and that does involve third parties. As I say, I am not in a position to say who it is. We are in the late stages of that and really only beginning the journey in terms of the acquisition of land.
Martin Browne (Tipperary, Sinn Fein)
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The small farmers and the small foresters are competing for that 100,000 ha with investment funds. I will leave it at that. Most of my questions have been answered and more members are looking to come in.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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To take up that point, is it correct that the 100,000 ha is the commercial joint venture with Gresham House?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Can answers be kept a bit shorter please? I ask the witnesses to answer as clearly as they can.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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On the 100,000 ha that are being purchased through this joint venture, what is the timeframe for that?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Okay.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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How many hectares are we talking about in the commercial joint venture?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Okay, 50,000 ha is the answer. This is what I mean about being brief because the Chairman will cut me short and that is why I want to-----
Jackie Cahill (Tipperary, Fianna Fail)
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It never worked before.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I will try. The 50,000 ha is a joint venture with Gresham House. What are they, the partners to Coillte, bringing to the table?
Ms Imelda Hurley:
We are in the late stages of engagement in terms of the fund manager and early investors and I am not in a position to identify who that third party is. As for what the third party would bring, Coillte does not have the required licences and authorities to be a fund manager in the first instance.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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They are going to be-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Are they bringing the funds?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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What is Coillte bringing?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Who will own the land?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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It will be Coillte's partners who own the land?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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So, Coillte which is a State-owned company, will enter into a partnership with a fund, will provide all of the expertise and the experience of a State-owned company as developed over the past number of decades and will do this to draw down grants from the Government to, at the end of the day, have 5,000 ha of Irish land in essentially private, non-domestic ownership.
Ms Imelda Hurley:
What we are doing and what our ambition is, is to support Ireland in its climate action initiatives and the delivery of afforestation. There is such a huge challenge ahead that there is a role for Coillte in supporting and delivering at scale. It is very important role in terms of forest-----
Jackie Cahill (Tipperary, Fianna Fail)
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We understand the reason but Deputy Carthy asked a question about the ownership.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I am coming to that in a minute but let me state the difficulty I have about the commercial activity. We have spoken before and the witnesses will be aware I am passionate about Ireland reaching its afforestation targets. As I have said a million times, it needs to be good for communities, good for the economy and good for the environment. In every single debate we have had, I have pointed out where we did things wrong and from which we should learn lessons is the experience of communities in Leitrim. That was a complete disaster. This appears to me to be Leitrim on steroids. What happened in Leitrim was that private, non-domestic investors came in, bought up land and built resentment among local farmers who were priced out. They created forests and because they had no stake, not being the State-owned company or local, they created huge hostility to a point where there are parts of the country now where afforestation is a dirty word. My fear is that what I am hearing today is that will be exacerbated and will become a much wider problem than we have seen there.
Mr. Mark Carlin:
That is not the intention at all. I understand the frustrations in Leitrim and I think it is borne from previous forestry practices, which have changed significantly. One of the big things we talk about in our afforestation vision is a really encouraging mix between native woodlands and productive trees done in the right places with the right management. That is critically important and is very different to what I understand-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Coillte has mentioned it is not trying to supplant private contractors or smaller domestic foresters. I remember when this State had a good housing policy, when I was on the council first and when local authorities bought up houses quite regularly. One policy my local council had, for example, was if it was planning to bid on a house but found out that a local first-time buyer was also interested, it would step back. Will Coillte be directing this fund to do that in the case of land for afforestation?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I have asked a specific question. When the fund or joint venture is operational and is looking at land, if it transpires that another forester is planning and has an eye to the same land and with a view to what already has been said about the fears of land price acceleration, will Coillte ensure the joint venture is instructed to step back in such instances?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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But in principle?
Mr. Mark Carlin:
Yes, absolutely. We have to collaborate carefully here because if there are three or four people bidding on the same thing to do the same thing with it, as I have said previously, we need to do this in a responsible way. We do not want to drive up the price of land and we do not want to squeeze anyone out. That is what-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I know the witnesses have indicated they cannot or will not deal with the specifics of what potential companies with which Coillte is engaging but we can take Gresham House as an example of the type of companies that are engaged in this type of activity. The witnesses may be aware of some very serious concerns within Scotland where a member of the Scottish Parliament, when describing a joint venture that included that company, stated "Its business objective is not to plant trees or save the planet but to aid the super-rich in avoiding paying taxes—income tax, corporation tax, capital gains tax and inheritance tax." Before Coillte enters into any such joint venture what oversight is it doing to look at the international experience of this type of joint ventures where they have been embarked on previously?
Ms Imelda Hurley:
We have been engaging with a number of different fund managers and we are in the late stages of being towards the end of that process. We are not in a position to provide an update today as to who it is but the Deputy can take it that we have gone through all of the rigour he would expect in identifying the fund manager and in due course, when we are in a position to provide more information, we will be happy to do so.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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When Ms Hurley says "in due course", I presume she means after contracts have been signed.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Let me ask, when the formal announcement is made, will it be a fait accompli? It will be just for the information of the public.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I am sorry but it is a fairly simple question. Will Coillte be announcing the proposed arrangement or the finalised arrangement?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Before that does Coillte consider that it needs the approval of their shareholders, as they describe the Department of Agriculture, Food and the Marine?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Thus, the answer is "No".
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Thus, the answer is "No".
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I am asking whether those consents will include approval from the Department. The answer I have been given by Ms Hurley is that such consent is not required, as far as Coillte is concerned.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Let me use a broad construct. Does Coillte consider it appropriate to get the approval of the Department for the construct in which it plans to engage with a third party beforehand?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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My next question should have been put five minutes ago-----
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Will Coillte, considering the Department is its sole shareholder, seek its approval for such a construct?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I know that. Will Coillte ask for its approval?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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It is being used by Ms Hurley's colleague.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I am taking it that is also a "No". With regard to oversight, I asked whether Coillte was looking at international evaluation. Would Coillte look at the financial history of those involved in a fund before it enters into an agreement with them? Would it ensure there was nothing untoward or that no constituent party of any fund had been found in breach of the Central Bank or Garda fraud, either domestically or internationally?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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In one famous instance that may have been mentioned, a British-based fund's Irish operations occurred on the basis of a purchase of an asset management company in Ireland and the founder of which was then appointed as managing director of Irish operations. The Central Bank fined those Irish operators €443,000 last year, which is not ancient history, because they had failed to submit a fraud report either to the Garda or Revenue over a two-month period. Would Coillte consider such an incident to be reason enough not to enter in to a construct with a company with that type of track record?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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That does not sound definite either. I wish to move on. I understand that is a joint venture.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Have private investors formed the fund?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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What do they get out of that?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Are they able to use that to offset?
Mr. Mark Carlin:
It is not an offsetting scheme. It is public good. It is corporate social responsibility, CSR, ESG or whatever term one wishes to put on it. The organisation is saying it will give the fund money and the fund then buys land and creates a native woodland. The organisation can say it has done that with regard to its natural capital accounting. It is not an offsetting scheme nor do we wish it to be so.
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Who owns that land?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Considering this is such a charitable, public-good type of endeavour, would the fund not gift the land to the State or to Coillte, as a State company?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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What is the duration of the fund?
Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I presume it is a number of decades.
Mr. Mark Carlin:
It would be. I can certainly come back to the Deputy with the specifics of the fund but, from the point of view of the public, these forests will be managed by Coillte. They will be integral in the Coillte estate. There is opportunity to be build trails and put in recreational facilities for people to enjoy. It will have the same look and feel as forests that are managed on the Coillte estate for people to enjoy. That is an important part of these forests.
Seán Sherlock (Cork East, Labour)
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I wish to continue on that theme. If I set aside the nature trust and the fact that corporates are piling in to the not-for-profit sector, it is good for ESG and for Coillte. That is where the game is at globally. It is all about ESG for corporates. That is fine. I can understand that. The new joint venture partnership, which I will call a special purpose vehicle, Coillte is considering setting up or is about to set up is a good way along the road. The process is not nascent or under consideration. It is very active. If I am reading Ms Hurley correctly, the legislation allows Coillte to do that or, at least, the legislation or the Act with regard to notification of what Coillte proposes to do may be silent. I do not know.
I have not gone through the Forestry Act with a fine-tooth comb, yet, but I am sure the witnesses can anticipate we will. The answers we are getting suggest something is being is being created, about which exactly Coillte is not at liberty to tell us, but the dogs here on the street know exactly what is being created, with whom, and its purpose. We have been around the around the houses and I ask for clarity. Does such a vehicle impact on Coillte's pre-existing footprint? Is this fund or special purpose vehicle with regard to the additional footprint or does it affect the entirety of the Coillte estate?
Seán Sherlock (Cork East, Labour)
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That is fine. I will park it. Mr. Carlin has clarified it. The representatives have made mention of the new forestry plant and €1.3 billion of an opportunity. It is clear to me that this special purpose vehicle will now bid for some of that €1.3 billion opportunity. Is that correct?
Seán Sherlock (Cork East, Labour)
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These are simple questions. They are not loaded. There is nothing too rhetorical about my approach. I am looking for light more than heat. I have looked at the grant rates for establishment under this new forestry plan. I assume Coillte will have looked at all of this and kicked the tyres on the premiums for the farmer or landowner and will have looked at the establishment grants. Under FT6, it is proposed that the current grant is €5,620 per ha. The proposed grant per ha for broadleaf, mainly oak, is €6,744. I am only taking FT6. We know there is FT1 to FT12.
Let us keep that figure in mind. For broadleaf, mainly oak, the premium is €6,744.
Mr. Carlin will be familiar with the Auxilia Group and its report. I think we all accept Professor Cathal O'Donoghue's bona fides. The professor is renowned and well established. I am sure Mr. Carlin has had access to this Auxilia Group report. I accept Professor O'Donoghue's bone fides anyway. I hope Coillte does as well. In Professor O'Donoghue's report, on page 37, there is a table entitled "Estimating total Establishment Costs by Species in 2023". Professor O'Donoghue states, for broadleaf hard, the total cost will be €10,551. Remember we have €6,744 of a grant, excluding the fencing, and this report is saying-----
Seán Sherlock (Cork East, Labour)
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Grant rates.
Seán Sherlock (Cork East, Labour)
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Chair, I think I said I am excluding premiums. Let me very clear. I am talking about establishment grants.
Jackie Cahill (Tipperary, Fianna Fail)
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The grants.
Seán Sherlock (Cork East, Labour)
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Chair, may I have some protection here?
Jackie Cahill (Tipperary, Fianna Fail)
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Yes.
Seán Sherlock (Cork East, Labour)
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Establishment grants only. That is all we are talking about here. Okay?
Seán Sherlock (Cork East, Labour)
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So as not to interrupt my flow again, Chair, with all due respect.
Jackie Cahill (Tipperary, Fianna Fail)
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Okay, Deputy Sherlock. Go ahead.
Seán Sherlock (Cork East, Labour)
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I thank the Chairman.
The cost for broadleaf soft is €9,631. If I accept the bona fides of Professor O'Donoghue and if I accept the figures that the Minister has put to us in terms of the new forestry grant already, I see the people who will establish these new forestry grounds to meet all of our targets and all of our ambitions as set out, even including in Coillte's "A Greener Future for All". That is a great document. It captures the zeitgeist. It needs to be where we need to be. Coillte is showing real leadership for the first time in a generation in respect of acknowledging the role that Coillte can play in terms of mitigation through afforestation and sequestration, and also in terms of the public good. That is all good. However, I cannot see, when one kicks the tyres on those figures, how one will get in the person-power - let me not be gendered in my language - to be able to create the opportunities that Coillte is talking about or, and this is where I really need Mr. Carlin's perspective, the economies of scale that Coillte has to be able to compete in the market, or squeeze the market, so much that it will be able to say to private foresters or contractors that it will take them in. What will happen is that private forestry will be squeezed out because Coillte will have the economies of scale to be able to pay the premiums and possibly additionality there as well through the creation of this joint venture. I worry that when everything is wound up, it will be Coillte with the joint venture. The fund manager, as Mr. Carlin said, will already be the owner. Therefore, the fund manager, management company or whatever the entity is on the additionality will walk away with the premiums. Irish private forestry contractors will be forced to work for this entity because it will be the entity that will have the economies of scale to be able to outdo the smaller private forestry owners. Does that make sense? Does that concern chime with Mr. Carlin in any way?
Mr. Mark Carlin:
There is quite a bit in that. From a grants point of view, they have announced new premiums and new grants. We have to welcome that.
It is difficult for me to comment on other companies' cost bases. What the Deputy put forward is that we have an advantage in economies of scale. Where we have a disadvantage is in our size as well because other companies can be leaner in this. Other companies can have a smaller cost base than we have. We can have a higher hurdle rate to be able to get into business like this. If one is leaner, it is slightly different. Each company has a different cost base. Certainly, from the size of our estate, there are some economies of scale there. I would recognise the economies of scale but, equally, I would say that other companies can be leaner and more agile.
In the past, when we were doing 15,000 ha or 20,000 ha a year, Coillte was happily coinciding with farmers and forestry companies when it came to afforestation. The great challenge we have is that it is such a small amount of afforestation now. This is what we were concerned about when we came out with the target of 100,000 ha. If one does the maths on that, it is 3,000 ha a year and one could ask if we are doing everything. That is why it is important to contextualise the 100,000 ha target in the target of reaching 18% forest cover in Ireland. That is an important point because what we are talking about here is a contribution. It is additionality. It is in and around 20%, and it is not intended to squeeze forest companies or farmers. We stated previously that it is the farmers who will have to do more of the afforestation because they own the land. It is important that we put the structures, the environment, the regulation and the incentives in place to get farmers back into afforestation.
Seán Sherlock (Cork East, Labour)
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I will put it a different way. If I go back to that €6,744, if one has lands that are at scale with a partner that is funding into this new so-called "Coillte nua" entity, Mr. Carlin is telling me that the smaller forestry companies, foresters and contractors are more agile and leaner. I remain to be convinced of what Mr. Carlin is saying there, and I say that respectfully. If Coillte is competing in that space for that €6,744 and it has got the personnel and the access to equipment and machinery that it will begin to build up, I cannot see how Coillte could not but squeeze out the smaller operators unless they get subsumed by Coillte and begin to become price-takers on contracts that so-called "Coillte nua" begins to control. In other words, Coillte nua would control the entire forestry sector and there would be a squeezing out of the small private forestry companies. It is a genuine fear that I have.
Mr. Mark Carlin:
Let me try to allay those fears. The Deputy is some way wide of the mark when it comes to that scale here because Coillte manages 50% of the forests. I refer to what the Deputy is playing out there in terms of price-takers and contractors and relationships. Certainly, 20 years ago, Coillte would have managed 80% or 85%. We now manage 50%. The private market, in terms of timber production, will be at 50% in ten years' time. There will be more opportunities than ever for contractors and other forest companies working within the private sector because the private sector will grow. What we are talking about is a very small percentage of afforestation.
The other point I would make is that some of the private forestry companies are already using third-party capital anyway. The model that we propose is a model that is already in the private sector in terms of the forest management companies using private capital. They do that skilfully. They have their own cost base and their own methodology to do that.
Seán Sherlock (Cork East, Labour)
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There is a difference. A private forest company will naturally go for private investment. It has no other choice. That is a given. Coillte is State-owned. That is the difference. I hope Mr. Carlin can appreciate here that what is a resource and what people feel they have ownership of is an entity that they want, not for their generation but for future generations who belong to us all.
Can Mr. Carlin understand the fears of people when he talks about new constructs, joint ventures, special purpose vehicles or whatever? The legislation allows Coillte to do what it wants in terms of notifying or not notifying, as the case may be. I am sure there is a relationship with Coillte such that it is keeping the Department, its key shareholder, abreast of everything that is going on. However, my fear is that we will end up with large swathes of our own land owned by corporate entities, which are offshored, which are international and which are competing with Irish people. These are unnamed corporates and international investment funds.
All of that is being cloaked in the language of ESG, of environmental goods and of climate action. That is the fear we have. We have sold off a lot of resources in this country that we could do with now. I will take as an example Irish Sugar in my hometown of Mallow, which was sold down the river for a song. The fear I have is that this is what Coillte is at as well.
Mr. Mark Carlin:
The Deputy has been complimentary about the vision in terms of its breadth. It is very ambitious in terms of what we are trying to do for climate restoration from a biodiversity point of view and with regard to planting new forest. It is an incredibly capital intensive programme of beyond €2 billion, as I am sure the Deputy will know. For us to execute this, we cannot do it with our own capital, even borrowed capital. We need to attract third party capital and get comfortable there because even some of the good things we have done very recently, including Avondale, were done with 30% of private capital. From a recreation point of view, from a forest creation point of view and even maybe for some of the restoration work, there are opportunities to take third-party capital, and we are going to have to take that opportunity, particularly when it comes to some of the ESG.
The good thing is that the forests that are created are managed by the State forester and they are open forests that are open for everyone to enjoy. They will be able to produce wood for houses and they will be able to deliver climate mitigation, but they will also deliver from a nature point of view. They will be delivering multiple benefits and they are managed by the State forester as well.
Seán Sherlock (Cork East, Labour)
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I would like to have Ms Hurley's perspective.
Ms Imelda Hurley:
I would like to build on what Mr. Carlin has said and I agree with everything he said. We are seeing very significant interest from Irish investors, which is to be welcomed. However, given the scale of the challenge in terms of the capital that will need to be deployed to deliver the climate action initiatives, international capital may also support the deployment of that.
Jackie Cahill (Tipperary, Fianna Fail)
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The time is up. I will have to move on.
Seán Sherlock (Cork East, Labour)
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I ask for a few more seconds. Ms Hurley mentioned Irish investors. Is this a multiplicity of special purpose vehicles? There is the one entity that has already been named, which is a UK investor. Is Ms Hurley saying there are other investors that will join with it or Irish investors who are going to take a piece of the pie as well?
Michael Healy-Rae (Kerry, Independent)
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I welcome the witnesses. Jerry Donegan, God be good to him, was our local forester when I was growing up. He would be in a Hillman Hunter on a Friday in the middle of the day when I used to break out of school. He was my next-door neighbour. I used to sit into the passenger seat with a biscuit tin box full of brown envelopes. His job on that day would be to go around, paying the men. I was absolutely delighted. My emphasis has been on paying the Coillte men who were working in our local forests. At that time, we had five Coillte foresters and we had 60 Coillte forestry workers working on the ground. Over the past four decades, things have got so bad that Coillte's presence on the ground does not exist anymore as it has made a conscious effort to get rid of all of the staff on the ground. There is no such thing as community foresters anymore.
I remember an occasion when there was a fire in a Coillte plantation and not one person in Coillte could be found in Kerry at the time to take charge of that fire. Is this the model going forward, to have no staff on the ground to answer questions? We have no forestry men, we have no service, and we have no community people working locally. We cannot point a finger at any house and say a person is working for Coillte. It does not exist. That looks very bad and it is very bad. Coillte has moved from having its own staff doing the work on the ground to contractors getting paid as little as possible. I must declare that I was one of those workers working for as little as possible for Coillte, carrying out sodding for the Department long ago when it was the Department of forestry.
What is happening now is that forests that were clear-felled in the 1980s have been clear-felled again, and there has been a massive drop in production. One would not have to be a professional forester to realise there are not as many trees growing in these areas as there should be, and what is there is not being maintained because, again, Coillte has no workers on the ground.
Is there a policy at present for Coillte to recruit foresters in the private sector? I would like the witnesses to clarify that. Has Coillte appointed staff to go after foresters from the private sector? I understand Coillte is back in the marketplace. We have spoken about that and I have heard the witnesses answer in regard to buying land. Coillte's plan is to plant 100,000 ha by 2050, which is obviously competing directly with the small farmers we were speaking about earlier who are trying to increase their holdings. Do the witnesses think this is right and fair? What research has been done by Coillte on the impact this will have on farming in rural Ireland? Will Coillte make the research it has available to this committee?
I see from the Minister’s diary and the Department diary that there have been many meetings between Coillte, the Minister and officials in the past two years. Will the witnesses give a detailed account of how many meetings have taken place? Do they think this is giving Coillte an unfair advantage over private companies? If those companies had not been in existence in recent years, nothing would have been planted at all. It was not thanks to what Coillte was doing that anything was planted, that private foresters were supported or that farmers were encouraged. It was only by the efforts of the private companies that were trying to encourage the private farmers to plant land. That was the only way we got anything planted.
Is it true there are people in the Department dedicated to working on the Coillte files alone? This is very important. I would like the witnesses to clarify whether the answer is “Yes” or “No”. There is a perception and the statistics are definitely there to back it up - this has come before the Chairman - that Coillte was able to get licences where the private farmer could not.
The Chairman will be glad to know I am finishing. Those are my questions. The sweeter, shorter and straighter the answers the witnesses can give, the better, in the nicest possible way. God be good to him, but when are we going to see the new young Jerry Donegans on the ground? At present, Coillte has nothing. It has no presence and it is not there on the ground for the people. That is wrong.
Ms Imelda Hurley:
I will make a start on those questions. The Deputy referenced meetings between Coillte and the Minister, and the multiplicity of those over the past two years. During part of that period, the licensing crisis and challenges were ongoing, and we were also in the process of working and developing our new vision, so there was a series of engagements naturally taking place. This was particularly in terms of the new vision and, as we developed it out, articulated our purpose, identified how we hoped to deliver and anticipated delivering for wood, for nature, for climate and for people, ensuring we would keep the Department, the Minister of State, Senator Hackett, in particular, and the Minister, Deputy McConalogue, as appropriate, updated to ensure the shareholder understood our plans. It was against that backdrop those meetings would have taken place.
Michael Healy-Rae (Kerry, Independent)
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Did that connectivity give Coillte an unfair advantage in terms of getting its licences over the line above everybody else's?
Ms Imelda Hurley:
Absolutely not. The focus in terms of Coillte licences has been to ensure we deliver licences with all of the information. Our anticipated screening and the Natura impact statement, NIS, are all for review by the Department of Agriculture, Food and the Marine, and it is for the Department to work through those licences in full detail. We have to adhere to the same process as everyone else. Certainly, all of that has to work through the normal process. The engagement with the Minister would be much more at a strategic level and is especially focused on matters such as the vision.
With regard to the 100,000 ha by 2050, we have considered very carefully what we believe to be the appropriate contribution Coillte would seek to make in terms of Ireland’s afforestation target. At 100,000 ha, it will be 2,000 ha to 3,000 ha per year, or 20% to 30%. Noting the scale of the challenge ahead, we see that as the role we can play in supporting Ireland’s afforestation while recognising that if we are doing 2,000 ha to 3,000 ha, some 5,000 ha to 6,000 ha a year will need to be delivered by the forest management companies and the landowners.
We see ourselves very much as seeking to play our part in terms of the overall target. We thought very carefully about that. Mr. Carlin articulated earlier that we continue to engage on that. It is possible that, in time, perhaps the scale of planting that is needed may increase. Some people point to higher targets from time to time, but we simply want to play our part in terms of supporting Ireland's overall climate action agenda and in thinking through all of that very carefully, recognising what we could do and what others could do as well.
I will pass over to Mr. Carlin to deal with the other matters.
Mr. Mark Carlin:
On Deputy Healy-Rae’s point about presence on the ground, it is a point that is well made. It is something we are reflecting on as well. He mentioned the word “community”. That is what we need to get back to in forestry. There has been a degree of centralisation of foresters, moving to central offices, perhaps a generation ago or ten years ago, when they had to, but as we have seen through Covid, new technology allows people to work much more easily in the field. That is something we want to make sure we do, to disperse our forestry and ensure we get them back in the community. That is a model we want to go forward with. We hire locally as well, to work locally. That is a very important part of the plan, going forward. I hope that will correct some of the things the Deputy is perhaps seeing and make sure we have a presence on the ground.
From the point of view of hiring foresters, we are hiring foresters. We hire foresters regularly. We also have a graduate programme, where we bring in graduates every year. There are two ways of hiring. We either hire directly or we bring in graduates and we develop them ourselves. That is a model that we will continue.
Michael Healy-Rae (Kerry, Independent)
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When I think what happened in the past, in my area we had people like Mossie Welsh in Sneem, and PJ Bruton, one of the finest foresters Ireland ever produced. These people were meticulous about maintaining the forestry. A tree would no more hit the ground after a windfall and they would have it cut up because they wanted to keep the place empty. I know there is this biodiversity nonsense now whereby, if a tree falls, the intention is to let it rot into the ground instead of cutting it, which is more rubbish and what more I will not say because I do not use bad language unless something falls on my finger. We must have maintenance. Let us call a spade a spade. What Coillte has done to the State forests is to have abandoned them. There is no maintenance. There is nobody checking the forests. Nobody is going out and seeing what way the forest is now. A forest is like a field or a house. People talk about property. A house, hotel or building is nothing unless it is maintained. It is a living, breathing thing and it must be taken care of. We have to be there. People have to be in and out of a forest or a field. If it is abandoned, what happens is that it all goes wrong. We must work at it. It is the same as anything in life, whether it is the car we drive or the machine we operate. We must change the oil, clean it, grease it and work with it. It must become an extension of ourselves. What are the forests of Ireland now? Who are they an extension of? Nobody. There are people like us now with suits, but there is no fellow with boots. Suits are not as good as boots. We must have people who know about forests and understand them. I drew timber out of a forest with a horse called Billy, for Willie Grainger. I gave a long time at it and I made no money at it, but it was a great learning curve. We need to understand forestry to know what is needed to keep it right. It is not just a matter of planting it and letting it off. I am not a critical person and I am sorry to say this, as I would love to be praising Coillte and saying it has great management structures, that it has a great presence on the ground and teams of men going out every day and working, but it has not. I am sorry. I will shut up.
Mr. Mark Carlin:
We invest heavily in forest maintenance, from establishment through to thinning. We also have biodiversity programmes in place. We have forest maintenance. We have 3,000 km of waymarked trails. It is a very large estate. We actively manage it for wood and nature in terms of biodiversity and restoration, and we have a lot of recreation. We use a network of foresters. We have foresters in the field. We use a network of contractors as well. It is very important we have a presence. On whether we could have a greater presence, that is what I referred to when I spoke about getting back into community forests, and having community involvement would be very important going forward as well.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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When did Coillte decide the strategy? How long is it on the go? Could Ms Hurley please give me a year?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Okay. When did Coillte make the Department of Agriculture, Food and the Marine and the Minister aware of what it was doing? Was it two years ago?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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The question I asked is when Coillte made the Minister aware of what it was doing.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Would the Minister have been aware Coillte was using investment funds two years ago? "Yes" or "No".
Michael Fitzmaurice (Roscommon-Galway, Independent)
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When?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Yes, but when?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Yes, but when was that, roughly?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Was it early on in the year?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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I know that, but I am just asking a simple question. When did the Minister know?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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The question is when did the Minister know.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Who in the Department of Agriculture, Food and the Marine would Coillte have kept up to date?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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I refer to the person rather than the Department.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Yes, I know, but who? We know them all.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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That is grand. That I all I wanted to know. Would the Department be aware of what was going on over the past year?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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That is perfect. I was looking at it for farmers. Am I right in saying that farmers who sow broadleaves get €28,000 over a ten-year period, including the planting?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Where I am just a bit lost is in relation to the Coillte profits. What is going on? Is it correct that Coillte made a profit last year of €124 million?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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I refer to the total profit.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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That is better still. What is the projected profit for this year, roughly speaking? I am not tying Ms Hurley down to €5 million or €10 million. I just want to know roughly.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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When Coillte had everything paid, what did it have?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Lovely. What does Ms Hurley think it will be this year? I mean roughly. I am not tying her down.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Would it be more than €100 million? That is all I am asking.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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That is okay. I am not trying to catch Ms Hurley out. What I am trying to establish is if we are looking at 3,500 ha a year, why is Coillte not buying it itself? I have done the figures at a fairly high rate. Coillte would be giving a good price for land and a fund of €30 million. Why is it that it has not gone down that road? What is the game?
Are the investment funds that are buying the land going to be drawing single farm payments? This year the Department has changed the system to ensure it does not need clean land as well as forestry. Are they going to be drawing the single farm payment and getting the grant? Is that part of the game that is going on here? What is the skin in the game for them with the timber at the end of the process?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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How much is the reforestation cost?
Michael Fitzmaurice (Roscommon-Galway, Independent)
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We still have €77 million.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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I do not know what sort of accountants Coillte has and will put the following to Ms Hurley, as the head of Coillte. If I has 100 acres of land and 25 acres of land came up for sale back the road from me, I would have a fair go at it and someone would give me the money somewhere. Coillte has 440,000 ha of land around the country yet it is not fit to invest in less than a quarter of that, which leads me to believe there is something curious about that situation.
Jackie Cahill (Tipperary, Fianna Fail)
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I fully understand the reason for establishing a trust for non-commercial timber as the timber will there for more than 200 years, so there will be no real financial return. However, with the income being generated by Coillte I must support Deputy Fitzmaurice and say I cannot understand why we are losing control of that land. Ms Hurley has told us there are Irish investors but, at the end of the day we, as a Government or a State body, will have no control over what these investors do going forward.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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I can answer the Chairman. A faceless investment company will buy the land in the community in opposition to farmers so that Coillte will not get a bad name for doing so. That is the game that is going on.
Jackie Cahill (Tipperary, Fianna Fail)
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We have had a very good debate here. The Coillte delegation got a fair interrogation here this evening because we, as a committee, are concerned about the strategy of Coillte. As I said in my opening remarks, the mission objective of Coillte and what it wants to achieve are exceptionally good. However, we, as a committee, are worried that Irish land will go into the hands of investment companies and we will have no say about the land going forward. As Deputy Fitzmaurice has stated, recently the criteria for the Common Agricultural Policy, CAP, has changed and we are concerned that this is the reason investment companies are getting into this business because they see a pot of gold at the end of the rainbow. I suggest, as Chairman of this committee, that we discuss in a private meeting whether we contact and invite the Minister to come in so we can question him about this strategy and ask him whether this is the best route for Irish forestry.
We, as a committee, discuss what happens in the agriculture, food and marine sectors. The Coillte delegation has given us a very good briefing and, therefore, left us with a very good understanding of its strategy. The end road is perfect and that is where we all want to get to, but it is the vehicle being used to get there that has caused us to be concerned. I understand there is no financial gain from non-commercial timber and that companies will invest in it to enhance their image. There is now a question about who will own the carbon credits, but leaving that aside, I am not as worried about non-commercial timber as I am worried about commercial timber. With the level of profits Coillte makes, I cannot understand why we are relinquishing control of the purchase of extra land. In the past it was because premiums were not available to Coillte, but they are now so I cannot understand why the sums do not add up.
We have had very informative session and, as Chairman, I appreciate the delegation coming in. We, as a committee, were very anxious to talk about this issue before the Christmas recess because people have contacted us with a lot of questions about this matter. Deputy Sherlock raised questions about the private sector, and private sector entities have lobbied us and have come before the committee in meetings on a few occasions because they are worried about this development going forward.
The cost of land is an issue that has been touched on this evening. A major player has been put into the fray with fairly limitless funds. It has been said that will not have an inflationary impact on the price of land but I do not wear that. The price of forestry land has increased very substantially in the past 12 months, so I can only see that going one way, and the price of better farmland has also increased in price. Perhaps there are other reasons for the price increase such as environmental reasons because farmers want to get extra ground to cover their nitrates commitments etc.
Coillte has presented a strategy here this evening that has great objectives, but 100,000 ha of land will be commercially planted. That is a lot of land and it has left us feeling uneasy, so we will discuss the matter. Having listened to the conversation here this evening, I believe all of the committee members are singing off the same hymn sheet and we will agree to discuss with the Minister whether we want this future for the ownership of Irish forestry.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Before any deal is done and before anything is signed and delivered, there is an onus on Coillte to meet this committee and the Minister. I make that suggestion because I fear there is a different skin in the game. The single farm payment has been changed. At one time you needed a portion of your land clean. If there are payments on land that is bought, will the vulture fund draw on it? Can Coillte answer my question and guarantee us that the answer is "No"? Investment companies will get the grants so what is the skin in the game for these investment companies when the timber is ready for harvesting? What is the percentage or deal that has been done?
Jackie Cahill (Tipperary, Fianna Fail)
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I will give the chief executive a chance to summarise.
Jackie Cahill (Tipperary, Fianna Fail)
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That is a very significant point.
Ms Imelda Hurley:
Yes. It is against that backdrop that we have looked at how we enable and support afforestation in Ireland. It is against that backdrop that the funds, which we have discussed this evening or what we have worked on, ensure we can deliver for Ireland in terms of afforestation. That is the critical point in terms of why Coillte is looking to this route.
Michael Fitzmaurice (Roscommon-Galway, Independent)
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Coillte has 440,000 ha and we are talking about 100,000 ha more. Coillte has 33 wetlands in its arse pocket that it could sell to either the National Parks and Wildlife Service or some other entity of the State because otherwise this land is going out of the equation.
Ms Imelda Hurley:
The reality in terms of new afforestation in Ireland is that access to grants and premiums, at least in our view, is part of enabling afforestation in Ireland. It is against that backdrop that we see the funds, which we have articulated this evening, as the best way Coillte can deliver afforestation for Ireland.
Jackie Cahill (Tipperary, Fianna Fail)
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I thank the delegation for giving the committee a lot of food for thought. The next committee meeting is tomorrow evening at 5.30 p.m. when we will examine agricultural schemes, the eradication of bovine tuberculosis, and compensation. As there is no further business the meeting now stands adjourned.