1. Activities to be financed: For the year 2023, two modalities to be financed will be considered; a-Recovery of Forest Cover (Recuperación de la Cobertura Forestal), which includes the activities of Reforestation, Regeneration, and Agroforestry Systems, and b-Maintenance of Forest Cover (Mantenimiento de la Cobertura Forestal), which includes Forest Protection and Forest Management. For this purpose, the following distribution is established:
| PSA Modalities | Activity | Quantity | | --- | --- | --- | | Recovery of Forest Cover* | Reforestation with fast-growing species | 1,000 hectares | | Reforestation with medium-growing species | 3,000 hectares | | | Forest Plantations with Reduced Rotation Cycles (PFTRR) | 1,000 hectares | | | Natural Regeneration | 3,000 hectares | | | | Establishment of trees in Agroforestry Systems | 500,000 trees | | --- | --- | --- | | Agroforestry Systems established in Forest Harvest Plantations (PPAF) | 50,000 trees | | | Mixed Systems in Agroforestry for micro-producers | 50,400 trees | | | Maintenance of Forest Cover | Forest Protection | 55,833 hectares | | Forest Protection for the safeguarding of Water Resources | 5,000 hectares | | | Forest Management** | 450 hectares | | *: Fonafifo will process all entry applications submitted for the sub-activities of Reforestation for 600 hectares and Agroforestry Systems, with species contained in the executive decrees on logging bans and threatened or endangered species (Decree No. 25663-MINAE and Decree No. 25700-MINAE and their amendments). **: Refers to all entry applications for farms where the forest management plan has been completed to the satisfaction of the State Forest Administration (AFE). For the execution of the forest management pilot project, an additional 154 hectares are available for contracting. Starting in the year 2022, a derived mechanism, financed with resources from contracts and agreements for Emission Reductions produced by forests, is enabled; with an amount of 450,000 hectares. This activity primarily recognizes the environmental service of reducing greenhouse gas emissions, but it can be complemented with the recognition of other environmental services when resources are available for that purpose, hereinafter, CREF contracts. The National Forest Financing Fund may vary the distribution established in the previous table, in accordance with the availability of the approved budget for the Payment for Environmental Services Program. Fonafifo is authorized to redistribute the budgeted resources of the Recovery of Forest Cover modality not committed by June 26 of each year, to be allocated to the CREF activity. If there is a greater allocation of resources available, according to article 5 of the Law on Tax Simplification and Efficiency No. 8114 published in La Gaceta No. 131, of July 9, 2001, and other financial resources that Fonafifo obtains for Payment for Environmental Services, they will be distributed according to the criteria of the financiers and the authorities of the Ministry (or corresponding authorities). In any case, the resources used for these purposes must be incorporated into the institutional budget or into Trust 544 Fonafifo/BNCR.
2. Of the payment amounts per activity and other conditions: 2.1. Reforestation Activity: The conditions that will govern the processing of applications for the recognition of environmental services in the Reforestation activity are as follows:
- a)The amount to be paid for fast-growing species referred to as: Gmelina arborea, Acacia mangium, Vochysia guatemalensis, and Vochysia hondurensis, will be seven hundred eighty-three thousand six hundred forty-four colones with 00/100 (¢783,644) per hectare, disbursed over a period of five years. Payments will be distributed as follows: 50% in the first year, 20% in the second year, 15% in the third year, 10% in the fourth year, and 5% in the fifth year.
- b)The amount to be paid for medium-growing species referred to as: Tectona grandis, Pinus sp, Cordia alliodora, Vochysia ferruginea, Eucalyptus sp, and Cedrela odorata, will be eight hundred eighty-three thousand five hundred seventy-six colones with 00/100 (¢883,576) per hectare, disbursed over a period of five years. Payments will be distributed as follows: 50% in the first year, 20% in the second year, 15% in the third year, 10% in the fourth year, and 5% in the fifth year.
- c)The amount to be paid for native species contained in Executive Decrees No. 25663-MINAE of October 8, 1996, and No. 25700-MINAE of November 15, 1996, will be one million three hundred twenty-five thousand three hundred sixty-six colones with 00/100 (¢1,325,366) per hectare, disbursed over a period of five years. Payments will be distributed as follows: 50% in the first year, 20% in the second year, 15% in the third year, 10% in the fourth year, and 5% in the fifth year.
- d)The amount to be paid for Forest Plantations with Reduced Rotation Cycles (PFTRR) for fast-growing species for packaging will be four hundred twenty-one thousand six hundred twenty-eight colones with 00/100 (¢421,628) per hectare. Payments will be distributed as follows: 50% the first year, 25% the second year, and 25% the fourth year.
- e)The conditions that will govern the processing of applications for the recognition of environmental services in the Reforestation PSA + Credit pilot project activity are as follows:
i. The amount to be paid for the PSA + Credit pilot project with the fast-growing species referred to as: Gmelina arborea, will be four hundred twenty-one thousand six hundred twenty-eight colones with 00/100 (¢421,628) per hectare, disbursed in 6 installments according to the following distribution: first year 11%, second year 16%, third year 17%, fourth year 18%, fifth year 19%, and the sixth year the remaining 19% which will be paid provided the beneficiary has consented through a formal document.
- f)Forest Plantations established with own resources for payment by results. The amounts to be paid will be those established in subsections a, b, and c above. The amounts will be distributed as follows: 50% upon signing the contract, and at twelve, twenty-four, thirty-six, and forty-eight months after said signing, 20%, 15%, 10%, and 5% respectively. The contracts will have the term provided for in article 2, subsections a and b of this resolution, but the years of existence of these plantations will be recognized; up to a maximum of 3 years from establishment.
- g)Individuals or legal entities wishing to reforest areas larger than the limit established in the Regulation to the Forest Law, Decree No. 25721-MINAE and its Amendments, may apply under a special financing scheme, and may double the 750-hectare limit, provided that the available resources are not used by small producers. The amounts to be paid will be those established in subsections a, b, and c above.
- h)The National Forest Financing Fund is instructed to incorporate, into Payment for Environmental Services contracts for the activity of Reforestation and Agroforestry Systems en Bloque, the minimum acceptable values for making payments.
The National Forest Financing Fund will use the following reference values to process the payments corresponding to each year:
Table 1. Minimum reference values for diameter (DBH) and total height (Htot), expected per year for plantations of fast-growing species (Gmelina arborea, Vochysia guatemalensis*, Acacia mangium, others).
| Age (years) | VRM DBH (cm)* | VRM Htot (m)* |
|---|---|---|
| 1 | - | 3.69 |
| 2 | 8.14 | 6.85 |
| 3 | 12.08 | 10.26 |
| 4 | 14.28 | 12.39 |
| 5 | 17.69 | 15.08 |
| 6 | 19.08 | 16.74 |
| 7 | 21.11 | 17.42 |
| 8 | 22.12 | 18.02 |
| 9 | 23.02 | 18.54 |
| 10 | 23.83 | 19.01 |
Table 2. Minimum reference values for diameter (DBH) and total height (Htot) expected per year for plantations of medium-growing species (Tectona grandis, Pinus sp, Cordia alliodora, Vochysia ferruginea, Eucalyptus sp, Cedrela odorata, others).
| Age (years) | VRM DBH (cm)* | VRM Htot (m)* |
|---|---|---|
| 1 | - | 1.65 |
| 2 | 4.78 | 3.24 |
| 3 | 7.57 | 5.06 |
| 4 | 9.08 | 6.24 |
| 5 | 10.72 | 7.49 |
| 6 | 12.47 | 8.78 |
| 7 | 14.26 | 10.10 |
| 8 | 16.04 | 11.42 |
| 9 | 17.76 | 12.71 |
| 10 | 19.37 | 13.94 |
| 11 | 20.83 | 15.09 |
| 12 | 21.52 | 15.86 |
| 13 | 22.60 | 16.83 |
| 14 | 23.52 | 17.71 |
| 15 | 24.28 | 18.52 |
| 16 | 24.91 | 19.25 |
*The reference values come from data from permanent sampling plots of reforesting companies provided by the National Forest Office (ONF), data from plots provided by the Forest Regents and recorded by Fonafifo, both data sets validated by Dr. Edgar Ortiz Malavassi, Professor at the Instituto Tecnológico de Costa Rica.
Table 3. Minimum reference values for diameter (DBH) and total height (Htot), expected per year for Forest Plantations with Reduced Rotation Cycles (PFTRR), for the species Gmelina arborea and other species from the fast-growing group.
| Age (years) | VRM DBH (cm) | VRM Htot (m) |
|---|---|---|
| 1 | - | 3.29 |
| 2 | 8.88 | 6.65 |
| 3 | 13.35 | 9.73 |
| 4 | 14.69 | 10.69 |
| 5 | 17.55 | 12.48 |
| 6 | 19.53 | 13.80 |
To calculate the total volume, the following equation must be used: Vtot = ?/4 * (DBH)² * Htot * Ff * N Where:
Vtot = Total volume per hectare expressed in cubic meters.
Age (years) VRM DBH (cm)* VRM Htot (m)* 1 - 1.65 ? = (pi) is the ratio of a circle's circumference to its diameter in Euclidean geometry.
DBH = Diameter at 1.3m height expressed in meters.
Htot = Total height expressed in meters.
Ff = Form factor equal to 0.5.
N = Number of trees per hectare.
- a)The State, through Fonafifo, will acquire the environmental services produced by forest plantations, understood as provided in subsection k of article 3 of the Forest Law No. 7575.
- b)Specifically, the environmental services provided by plantations will be paid according to the annual growth of biomass in accordance with parameters established in this resolution. Said payments correspond to the total number of years of the agreed term; however, in order to allow the establishment of the plantation and its maintenance, payment will be advanced during the first five years.
- c)Fonafifo may modify, when so requested, those contracts signed before the year 2013 that demonstrate having reached a minimum production of 13 cubic meters of mean annual increment per hectare. For such purposes, Fonafifo may request the information it deems pertinent.
2.2. Natural Regeneration Activity: The conditions that will govern the processing of applications for the recognition of environmental services in the Natural Regeneration activity, carried out on denuded areas, without forest cover (cobertura boscosa), with nearby seed sources, in areas in the process of regeneration that do not meet the definition of forest and are free from grazing; are detailed below.
- a)The amount to be paid for Natural Regeneration will be one hundred seventeen thousand nine hundred forty-eight colones with 00/100 (¢117,948) per hectare, disbursed in five annual payments of 20% over a period of five years.
2.3. Agroforestry Systems Activity: The conditions that will govern the processing of applications for the recognition of environmental services in the Agroforestry Systems activity are detailed below.
- a)The amount to be paid will be one thousand eighty-five colones with 00/100 (¢1,085) per tree, integrated into Agroforestry Systems and disbursed over a period of five years. Payments will be distributed as follows: 50% in the first year, 25% in the third year, and 25% in the fifth year.
- b)The amount to be paid will be one thousand six hundred eight colones with 00/100 (¢1,608) per tree, integrated into Agroforestry Systems, strictly with native species contained in Executive Decrees No. 25663-MINAE of October 8, 1996, and No. 25700-MINAE of November 15, 1996, disbursed over a period of five years. The payments will be distributed as follows: 50% in the first year, 25% in the third year, and 25% in the fifth year.
- c)The amount to be paid will be one thousand six hundred eight colones with 00/100 (¢1,608) per tree, under the activity of Agroforestry Systems established in Forest Harvest Plantations (PPAF), financed through forest credit. Payments will be distributed as follows: 80% will be paid once the contract is signed and the trees have reached 36 months of age; the remaining 20% will be processed when the trees are 60 months of age, in the fifth year of the project.
- d)Mixed Systems in Agroforestry for small producers: The conditions for this modality are: When carrying out forest protection activities, a payment of thirty-six thousand eight hundred twenty-three colones with 00/100 (¢36,823) per hectare per year, over a period of five years (here, if necessary, the existing fractions of hectares will be calculated, up to the first decimal). When dealing with denuded areas or areas in the process of regeneration, a payment of twenty-three thousand five hundred eighty-nine colones with 00/100 (¢23,589) per hectare per year will be recognized, over a period of five years. When carrying out reforestation activities with timber or multi-use species outside the forested area, a payment of three hundred twenty-three colones with 00/100 per tree (¢323) per year will be recognized, over a period of five years; a minimum quantity of two hundred planted trees or identified existing trees will be recognized, up to a maximum of two thousand two hundred trees. In this sub-activity, a single contract may be made covering the different activities, and the term shall be five years counted from the signing of the contract.
2.4. Forest Protection Activity: The conditions that will govern the processing of applications for the recognition of environmental services in the Forest Protection activity are detailed below:
- a)The amount to be paid for Forest Protection will be three hundred sixty-eight thousand two hundred twenty-nine with 00/100 (¢368,229) disbursed over a period of ten years. In the case of applications located within water importance zones, identified by the Instituto Costarricense de Acueductos y Alcantarillados, the Dirección de Aguas, and Fonafifo, an additional amount of ninety-two thousand sixty-two colones (¢92,062) per hectare will be recognized, disbursed in ten annual payments of 10% over a period of ten years. This additional amount will be applied until the budget allocated for this activity is exhausted.
2.5 Forest Management Activity:
- a)The amount to be paid in Forest Management projects will be one hundred forty-three thousand eight hundred forty-one colones with 00/100 (¢143,841) per hectare, disbursed in five annual payments of 20% over a period of five years.
- b)The amount to be paid in the Forest Management pilot project will be four hundred ninety-eight thousand colones with 00/100 (¢498,000) per hectare, disbursed in 10 annual payments according to the following distribution: year 1 20%, year 2 20%, from year 3 to 9 7%, and 11% in year 10, over a period of ten years.
2.6 Forest Emission Reductions Contracts (CREF). The conditions that will govern the processing of applications for the recognition of forest emission reductions are detailed below:
- a)The amount to be paid in CREF projects will be eighteen dollars 00/100 ($18) per hectare per year. Under this scheme, the payment is retroactive once it has been verified that the emission reduction actually occurred.
- b)The maximum number of hectares to be contracted will be 450,000 ha for private forests; this amount may increase if there is availability of external financing resources for this purpose.
- c)The term of the contracts may be retroactive to the year 2018, and their validity will be until December 2024, as was agreed with the International Bank for Reconstruction and Development (IBRD), partial financier of the projects. Based on what is indicated in the fifth considering of this resolution.
The National Forest Financing Fund and Trust 544 BNCR-FONAIFFO are authorized to use resources from the national budget allocated to this body, specifically from the Recovery of Forest Cover Modality that are not committed for the year 2023, to complement a payment for the environmental service of biodiversity protection to CREFs already signed and those that may be signed. The procedures manual for this instrument will determine, among other things, the amount, requirements, and procedure for the respective payment.
3. Updating of amounts to be paid. The amounts established per activity within the Payment for Environmental Services Program will be updated annually using the Consumer Price Index (IPC), calculated by the Instituto Nacional de Estadística y Censo (INEC), at the close of the previous year's period. In the case of CREFs, since the payment is estimated in dollars, the amount to be paid is subject to the exchange rate established by the BCCR on the corresponding payment date.