Land and Forest Iceland
Forestry projects on legal estates
This project facilitates afforestation on privately held land to:
enhance land use,
foster regional development,
and elevate overall quality.
Landowners and farmers may participate in afforestation initiatives on their properties for commercial or other land improvement and sustainability objectives.
Shelterbelts are frequently incorporated into these projects, involving the strategic planting of trees and shrubs to:
mitigate land erosion (wind and water),
enhance microclimate for agricultural production and livestock,
and provide shelter for people, livestock, structures, and farming operations.
2026 Forestry Project Rates
on Statutory Estates, 15 February 2026
According to Article 14 of the Forestry Act No. 33/2019, as amended, Land and Forest Iceland shall cooperate with forest owner associations in the respective regions. Land and Forest Iceland shall seek the opinion of the Icelandic Forest Owners Association (LSE) when determining reference criteria for reimbursement of approved costs pursuant to Article 11, paragraph 4. Furthermore, Land and Forest Iceland and the Icelandic Forest Owners Association shall establish joint procedures governing their consultation process.
With reference to this legal provision, as well as Article 7 of Regulation No. 50/2026 on incentive and support projects in land reclamation and forestry, the following reference rates (Rates 2026) are presented for consultation.
Since 2020, an agreement has been in place between LSE and Land and Forest (formerly the Icelandic Forest Service) stating that rate adjustments shall be calculated as a combination of wage indices and the consumer price index (cost of living), comparing January of one year to January of another. The weighting used is 60% wage index and 40% consumer price index. Based on this calculation, rates will increase by 4.36% in 2026.
Rates | |||
|---|---|---|---|
2025 | 2026 | ||
1. | Planting | ||
67-hole tray | 24.35 | 25.4 | |
40-hole tray | 28.77 | 30.0 | |
35-hole tray | 33.04 | 34.5 | |
24-hole tray | 35.43 | 37.0 | |
Cuttings | 21.29 | 22.2 | |
2. | Fertiliser application | ||
on new plantings | 13.40 | 14.0 | |
on older plants | 17.64 | 18.4 | |
3. | Tilling by hand | 18.77 | 19.6 |
4. | Difficult tilling by hand | 24.49 | 25.6 |
5. | Administration fee | 9.80 | 10.2 |
6. | Supplimentary or additional planting | 7.19 | 7.5 |
7. | Plant transport | ||
Within 24,9 kms from distribution centre | 2.44 | 2,5 | |
25-74.9 kms from distribution centre | 4.09 | 4,3 | |
More than 75 kms from distribution centre | 5.71 | 6.0 | |
8. | Soil preparation | 58,447.0 | 60,997.1 |
9. | Pre-thinning | ||
A) For trees/stems less than 7 cm in diameter DBH payments are kr. | 125.85 | 131.3 | |
B) For trees/stems more than 7 cm in diameter DBH payments are kr. | 192.77 | 201.2 | |
10. | Fence maintenance kr. per contracted hectare | 965.95 | 1,008.1 |
Explanatory Notes
Planting. Payment varies per plant depending on tray size.
For new plantings: based on 12.5 g per plant, applied approx. 5 cm from the plant (upslope if on a slope). The rate includes a subsidy for fertiliser purchase, assuming nitrogen and phosphorus (N-P) fertilisers. Common N-P ratios include 26-13, 25-5, 23-12, and 24-9.
For older plantings (one year or older): based on 25 g per plant, applied similarly. Consultation with a forestry advisor is required if fertilising older plantings.
Fertiliser and fertilisation. Different rates apply depending on application:
Manual scarification. Removal of vegetation cover (approx. 20 × 20 cm) to improve conditions for planting.
Difficult manual scarification. Same as above but applies to dense grassland or shrubland.
Supervision fee. Includes plant handling and transport within the planting area, as well as completion and submission of maps and planting reports.
Supplementary planting / mixing. Paid when planting into existing stands, subject to advice and approval from a forestry advisor. This is added to planting costs (see item 1).
Plant transport. Fixed fee per plant.
Soil preparation. Reference rate when the farmer carries out soil preparation (ploughing, harrowing, etc.).
Payments for thinning. Payments for pre-commercial thinning in larch stands and first thinning (areas < 3 ha) are based on number of trees cut. Larger areas are subject to tendering. Forest owners may match the lowest bid on their land.
Fence maintenance. Payments are based on ISK per contracted hectare, according to regulations effective from 1 January 2022.
Shelterbelt and Shelter Forest Contributions
Land and Forest Iceland:
Plans shelterbelts in consultation with the landowner,
Supervises implementation,
Provides guidance,
Supplies invoices for materials (plants and plastic) for VAT reimbursement.
Contributions include:
Advisory services and planning
Plants and supplements
Planting (according to rates)
Plastic sheeting
The landowner is responsible for:
Soil preparation
Fertilisation
Weighting and securing plastic
Installation
Protection (e.g. fencing)
Failure to follow guidance may result in loss of support. Shelterbelts established under these terms are the property of the landowner.
Track Construction
Track shredding has followed the same rate as soil preparation but is calculated per length rather than area. Costs are determined in cooperation with the landowner. Each project is planned individually and prioritised accordingly.
Rules on Contributions for Fence Maintenance
Based on the Forestry Act No. 33/2019 and Regulation No. 50/2026:
Parties with registered forestry agreements may apply for fence maintenance support during planting and early growth stages.
Eligibility lasts up to 10 years after the last planting (minimum 1,000 plants). Extensions may be granted if protection is still needed.
Applications are submitted annually alongside other forestry support applications.
Payments are based on ISK per hectare; the 2022 reference rate was ISK 750/ha.
Rates are updated annually in line with price changes.
Payments are finalised following inspection by a forestry advisor.
These rules originally took effect on 1 January 2022 and align with current regulations on regional forestry projects.
Land and Forest Iceland provides a standardised form for documenting operations conducted on legally designated properties under a forestry agreement and its corresponding plan. Forestry operators submit these registrations to Land and Forest Iceland's forestry advisors.