COBALT conducted an analysis which found no unlawful state aid in State Forest Management Centre`s (RMK) large contracts

COBALT analyzed the cooperation protocols and supply contracts (Contracts) concluded by the State Forest Management Centre (RMK) in 2001, 2013 and 2014 for the sale of low-quality timber. The National Audit Office found in its report of July 4, 2024, that RMK’s actions in concluding the Contracts did not create the preconditions for selling timber at market prices, which in turn may have created a risk of prohibited state aid.

The state aid analysis conducted by COBALT in cooperation with JP Economic OÜ showed that the above-mentioned contracts concluded by RMK in 2001, 2013, and 2014 were concluded under market conditions. Although RMK was able to sell low-quality timber at higher prices than the contract prices during the term of the contracts, the economic analysis indicated that without the contracts concluded in 2001, 2013, and 2014, obtaining the corresponding external sales price for the contracts would have been extremely unlikely. Due to the existence of the contracts, additional demand for low-quality timber arose in Estonia, which in turn allowed RMK to sell additional timber that was previously unsold or exported.

Consequently, the analysis did not identify any incompatibility with the State aid rules in relation to the sale of low-quality timber concluded by RMK in 2001, 2013 and 2014.

On behalf of COBALT the analysis was carried out by Specialist Counsel Mart Blöndal.