Legal Alerts/22 Aug 2022

The Finnish Government Proposes the Fast-tracking of Green Transition Investments

The Finnish Ministry of the Environment has proposed a draft legislative bill and budget increases to temporarily expedite permit procedures that will benefit the green transition. This proposal is based on the measures of the Finnish government put in place following the Russian invasion in Ukraine.

Which projects will be eligible?

The draft bill proposes prioritisation in the form of establishing a fast track for the permit procedures of the following investments:

  • Renewable energy plants: Wind, solar, geothermal, ambient, tidal, wave, other ocean, hydro and biomass energy, landfill and wastewater treatment gas, biogas from non-fossil sources
  • Other renewable energy projects in a water-based environment: E.g. transmission lines
  • Industrial electrification to replace fossils: Industrial electrification projects to replace fuels or fossil raw materials
  • Green hydrogen: Manufacturing and utilisation of hydrogen from renewable sources
  • Carbon capture: Carbon capture, storage, and utilisation
  • Battery plants: Manufacturing of batteries, battery materials, and reuse of batteries.

Gaining access to the fast track means that environmental and water permit applications for projects that fall under the scope of the bill will be prioritised by permit authorities over other applications. In addition, appeals that concern these permits – as well as appeals against local detailed plans for renewable energy plants and general plans for wind power plants – will be prioritised in administrative courts if the bill passes into law in its current form.

The narrow criteria established in the draft would exclude mining projects related to battery minerals.

How will projects be selected for the fast track?

In order to gain access to the fast track, the applicant must prove that the project is in line with the Do No Significant Harm principle (the DNSH principle), which is also a criterium for green transition funding by the EU Recovery and Resilience Facility.

For a project to meet the criteria of the DNSH principle, the project cannot have significant adverse effects on the six environmental objectives. These objectives are climate change mitigation and adaptation, the sustainable use and protection of water and marine resources, transition towards a circular economy, pollution prevention and control, and the protection and restoration of biodiversity and ecosystems.

The DNSH principle is used as a concept in corporate responsibility matters, and it has not previously been introduced into Finnish environmental law. Hence, the application of the DNSH principle would require for licensing authorities to assess whether a project meets the criteria of the DNSH principle separately for each project in order to determine whether the project qualifies for prioritised processing. This prioritisation would be done separately from the evaluation of each project’s environmental impacts and licensing criteria in material environmental law.

When will the proposal pass into law?

The fast track is proposed to apply from 2023 to 2025 for permit authorities and from 2023 to 2027 for administrative courts. In connection with the bill, the proposal also contains a budget increase of five million euros for both permit authorities and administrative courts. However, the prioritisation of a select number of projects will likely, at least in the shorter term, result in delays in the permitting of projects that are not prioritised.

The proposal has undergone a public hearing phase but has yet to be adopted by the government. The bill is expected to be sent to the parliament for processing later this year, and the proposal may undergo further adjustments during the parliamentary committee hearings.

Borenius’ Environment & Natural Resources team will continue to monitor the situation and provide updates as the bill progresses through the legislative process. If you have any questions, please feel free to contact any of the Borenius attorneys listed in this alert or those with whom you usually work.

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Additional information

Jussi Airaksinen

Senior Associate

Helsinki

Casper Herler

Managing Partner

Helsinki