References/14 Jun 2023

Borenius advises Wasaline in connection with the EU Emissions Trading Directive to secure fair competition and protect the Turku archipelago

In line with the European Union’s green transition policy initiative, the EU Emissions Trading Directive (2003/87/EC) has recently undergone amendments in order to gradually include maritime transport within the purview of the Directive. The amendments include a so-called island derogation whereby maritime transport via scarcely populated island communities is effectively excluded from the emission costs ensuing from the EU’s emissions trading system during the years from 2024 to 2030.

Whereas the EU Emission Trading Directive has already been implemented nationally via the Finnish Emissions Trading Act (311/2011), the newly amended Directive provides national legislature with considerable discretion as to whether the island derogation is adopted into the Act. If nationally implemented, the island derogation would apply exclusively to maritime transport via Åland, which would seriously undermine the cost competitiveness of the shipping companies that primarily operate via northern maritime routes. It is also argued that the derogation would give the shipping companies an incentive to operate unnecessarily via Åland.

Wasaline is one of the shipping companies that are competitively disadvantaged by the contemplated derogation. Wasaline currently operates on the Vaasa-Umeå maritime route in the narrowest sea strait separating Sweden and Finland in the Gulf of Bothnia. In addition to being a popular route for leisure travellers, the Vaasa-Umeå route is one of Finland’s crucial maritime routes for the national supply security. Consequently, the national implementation of the island derogation would not only be harmful for the Turku archipelago but also distort competition and possibly undermine Finnish supply security in crisis situations. Moreover, following the implementation of the derogation, the sustainment of shipping activities on the crucial Vaasa-Umeå maritime route is likely to require state aid measures by the Finnish state.

Given the complexity of the competition law, state aid and national supply security considerations involved, Wasaline and Borenius have actively participated in the EU and Finnish legislative procedure regarding the island derogation by having discussions with various EU representatives, the Finnish Government as well as the Finnish Competition and Consumer Authority.

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Ilkka Aalto-Setälä



Henrik Koivuniemi

Senior Associate