• 10.10.2023 at 06.45
• Performance audit

Private forestry subsidies and compensations – Promoting wood production and safeguarding biodiversity

Follow-up completed: 21.05.2026

The audit examined the performance of different subsidies for private forestry, focusing on the objectives of promoting wood production and safeguarding biodiversity. Simultaneously, the audit assessed how the funding systems functioned as a whole in light of these two main objectives. The follow-up found that the audit’s recommendations have been partially implemented.

Summary of the follow-up

In the follow-up, it was determined that, with the introduction of the new Metka subsidy system, wood production subsidies have been assessed within the framework of the legislative process in a manner typical of legislative projects. According to the review, the actual assessment of the system’s impacts will begin in 2026 or 2027. Tax subsidies have not been assessed in an overall manner, as was recommended by the NAOF.

According to the review, the Ministry of Agriculture and Forestry has developed indicators for monitoring the impacts of the Metka system. The Ministry of the Environment has also developed the monitoring of the METSO programme attempted to improve the programme’s impact and cost-effectiveness. 

About the audit

The state has supported wood production in private forests for nearly 100 years. The Kemera subsidy system, which was managed by the Ministry of Agriculture and Forestry, was in use between 1997 and 2023. During this period, relatively few changes were made to the subsidy system, even while the forestry sector’s operating environment was undergoing significant changes. Approximately 80–90% of the Kemera subsidy was used to promote wood production. However, based on the audit findings, stronger evidence is needed regarding the incentive impacts of supporting wood production, as well as clearer justifications for the subsidy’s existence in a situation where a functioning market for wood already exists. The forestry incentive scheme (Metka), which replaced the Kemera system, entered into force at the beginning of 2024.

The second primary objective of the Kemera system was to safeguard forest biodiversity. This was to take place primarily through Kemera’s environmental subsidy and nature management projects, which were considered part of the METSO programme. In addition, Kemera’s subsidy conditions for wood production included individual environmental conditions, but their effects were not monitored. The subsidies and conditions related to wood production were not fully aligned with the biodiversity objective.

At the time of the audit [2023], the funding for the METSO programme consisted of Kemera’s 10-year environmental subsidies and ecological management subsidies, as well as the appropriations for the conservation and ecological management handled by the Ministry of the Environment. The programme was anticipated to achieve its quantitative conservation objectives by 2025, although this was uncertain for the Kemera subsidies. Based on the audit, the quality of the conservation could also be considered good. However, the National Audit Office recommended that the ministries jointly come up with ways to further develop the programme’s cost-effectiveness and impact. For example, a review on the appropriateness of fixed-term conservation agreements would be necessary, as they carry the risk that the state may lose the conservation contribution it has already invested in once the agreement expires.

The follow-up has been completed. The report is available in Finnish only.