Legal Alerts/9 Oct 2024

The Finnish Government’s Legislative Plan for the Autumn Session 2024 – Upcoming Changes to Environmental, Natural Resources, and Energy Legislation

The Finnish Government, led by Prime Minister Petteri Orpo, has previously announced its legislative plan for the autumn session of 2024, with preliminary details for the spring session of 2025. The legislative plan includes descriptions of the key contents of upcoming Government proposals and an estimate of when the Government will present them to the Parliament.

Borenius’ Environment & Natural Resources and Energy & Infrastructure teams have been actively monitoring the legislative process. In this Legal Alert, we provide insight into the most important upcoming legislation related to the environment, natural resources, and energy.

Borenius Office at Eteläesplanadi 2, Helsinki

Key highlights

New act on offshore wind power in Finland’s exclusive economic zone: Finland to establish a competitive tendering system for offshore wind power in its exclusive economic zone. The Government has ended the previous open-door policy for offshore wind power in Finland’s exclusive economic zone and is proposing new legislation that will be based on a tendering system. A Government proposal regarding the new act (HE 147/2024) was submitted to Parliament on 3 October 2024.
- Please see our Legal Alert on the Government proposal. The Government is also planning to introduce new legislation that would extend real estate and income taxation to Finland’s exclusive economic zone, as detailed below.

Amendments to the Act on the Organisation of River Basin Management and the Marine Strategy, the Environmental Protection Act, and the Water Act: Amendments to water management legislation will codify binding environmental objectives to ensure compliance with the Water Framework Directive (2000/60/EY) and allow derogations from water management environmental objectives outside the water management planning process. Estimated week of presentation: 41/2024.

New temporary act on tax incentives for clean technology investments: A temporary tax compensation will be proposed for industrial investments supporting the transition to a net-zero economy, as allowed by the EU’s temporary crisis framework. The credit could be up to 20% of the total investment with a maximum of EUR 150 million per project. The tax credit will be granted for new investment projects by the end of 2025. Companies can deduct the credit from corporate income tax from 2028 onwards. Estimated week of presentation: 41/2024.
- Please see our previous Legal Alert for further details.

Amendment to the Energy Efficiency Act: The proposal aims to implement Article 12(1) of the revised EU Energy Efficiency Directive (EU/2023/1791), which requires data centre owners and operators to make certain information related to the energy efficiency of their data centres publicly available. According to the draft Government proposal, data centres in Finland with an IT power demand of at least 500 kW would be required to publicly disclose information related to data centre identification, physical and operational metrics, and performance metrics as per Annex VII of the Directive, excluding trade secrets. Estimated week of presentation: 41/2024.

New legislation on real estate and income taxation in Finland’s exclusive economic zone: Finland plans to utilise its taxation rights in its exclusive economic zone as allowed under the UN Convention on the Law of the Sea and extend real estate and income taxation to cover Finland’s exclusive economic zone as well. The main objective is to ensure that the taxation of offshore wind power in Finland’s exclusive economic zone corresponds to the taxation of offshore wind power within Finland’s territorial waters. Estimated week of presentation: 44/2024.

Amendments to the Electricity Market Act and the Act on the Comparison Tool of Electricity Supply Contracts: Proposed reforms to the Electricity Market Act (588/2013) will include enabling a single billing model and addressing issues with problematic sellers. The changes will harmonise the general structures of distribution network pricing to promote the introduction of power charges and market-based end-user load control in the distribution network. The definition of the connection line in the act will be clarified so that energy storage facilities located adjacent to power plants can utilise the power plant’s connection line or a shared connection line for multiple power plants. The provisions of the Electricity Market Act regarding the network operator’s obligation to connect will also be clarified with regard to the requirement of a reasonable connection time and to align with Directive (EU) 2024/1711. Additionally, the Government will propose the implementation of the provisions on compensation for electricity from renewable sources set out in the Renewable Energy Directive (EU) 2018/2001 (RED II). Estimated week of presentation: 45/2024.

Amendments to the Environmental Protection Act: Amendments will include repealing the requirement for environmental permits for small capacity hydrogen production by electrolysis, an amendment related to the gasification of waste, changing the requirement for farmstead-scale biogas production from needing a permit to simply requiring a notification, and prohibiting snow dumping into bodies of water. Estimated week of presentation: 46/2024.

Single point of contact for critical raw material projects and priority for strategic projects: The Government proposal would establish the role of a single point of contact authority in accordance with the EU’s Critical Raw Materials Act (CRMA) and enforce priority for strategic projects in the permit procedures under the Environmental Protection Act and the Water Act. The proposal aims to amend the Act on the Processing of Environmental Protection and Water Matters by Regional State Administrative Agencies (898/2009) and the Act on the Environmental Impact Assessment Procedure (252/2017). Estimated week of presentation: 47/2024.

Amendments to the Act on the Redemption of Immovable Property and Special Rights – increase in compensation for expropriation: Amendments to the Act on the Redemption of Immovable Property and Special Rights (603/1977) will provide full compensation corresponding to the market value instead of the fair value for expropriated property with a proposed additional 25% increase in compensation. The provisions on value reduction due to local detailed planning would be repealed. Estimated week of presentation: 48/2024.

New act on the supervision and sanctioning of obligations under the EU’s Deforestation Regulation and an act to amend Section 1 of the Act on the Enforcement of a Fine: New legislation on deforestation will be prepared, specifying the designation of a competent authority and the details of its competence, as well as the sanctions for activities that are in breach of the EU Deforestation Regulation (EU) 2023/1115. The current Act on the Placing on the Market of Timber and Timber Products (897/2013) will be repealed. Estimated week of presentation: 50/2024.

For detailed information on how these changes may affect your business, please reach out to the members of Borenius’ Environment & Natural Resources and Energy & Infrastructure teams.

Other upcoming Government proposals on environmental, natural resources, and energy legislation

Autumn session 2024 (September 2024 – January 2025)

Amendment to the Waste Act (Phase I): Amendments to the Waste Act (646/2011) will limit municipal responsibility for waste management to household waste. The proposal suggests designating the Finnish Safety and Chemical Agency (Tukes) as the market surveillance authority in accordance with the new EU Battery Regulation (EU) 2023/1542, which mandates the appointment of such authorities in Member States. The relevant Government proposal (HE 103/2024) was submitted to Parliament on 19 September 2024.

Amendment to the Building Act and related acts: The Government proposal aims to amend the Building Act (751/2023) to make it clearer and less bureaucratic based on feedback received from stakeholders before the act’s entry into force. The relevant Government proposal (HE 101/2024) was submitted to Parliament on 19 September 2024.

Amendments to the Act on a Temporary Forestry Incentive Scheme: The act would be amended to remove support for new forest roads and allow for applications to be suspended if funds are limited. The relevant Government proposal (HE 115/2024) was submitted to Parliament on 23 September 2024.

Amendment to Section 21 of the Forest Damages Prevention Act: The proposal includes removing the erroneous reference to “state” nature reserves in Section 21(1) of the Forest Damages Prevention Act (1087/2013), ensuring that state liability for forest damage does not extend to private nature reserves. The relevant Government proposal (HE 142/2024) was submitted to Parliament on 26 September 2024.

Amendment to the Act on the Promotion of the Use of Renewable Fuels in Transport and related acts: The objective of the amendments is to moderate the rise in distribution obligation levels for renewable fuels in transport and to introduce a flexibility mechanism for fulfilling the obligation in line with Prime Minister Petteri Orpo’s Government programme. The amendments will also implement the national requirements mandated by the Revised Renewable Energy Directive (EU) 2023/2413 (RED III). The amendments are intended to enter into force on 1 January 2025. The relevant Government proposal (HE 121/2024) was submitted to Parliament on 23 September 2024.

New Act on Emissions Trading for Fuel Distribution: The proposal includes the implementation of the Emissions Trading Directive (EU) 2023/959 regarding emissions trading for fuel distribution. A new emissions trading scheme will be introduced that will cover road transport, the heating of buildings, and industries and construction that are currently not included in the existing emissions trading system. The relevant Government proposal (HE 119/2024) was submitted to Parliament on 23 September 2024.

Amendment to the Climate Change Act: The obligation for municipalities to prepare climate plans will be repealed. In the future, the preparation of the plan would done on a voluntary basis, supported by an emissions data service run by the Finnish Environment Institute. The relevant Government proposal (HE 151/2024) was submitted to Parliament on 3 October 2024.

New Act on the Protection of Critical Infrastructure and Improvement of Resilience (CER Act): New legislation will be proposed to protect critical infrastructure and improve resilience, implementing the EU Directive on Critical Entities’ Resilience (EU) 2022/2557. Critical entities, including private companies that fall within the scope of the Directive, would be obliged to conduct risk assessments, draw up resilience plans, and report incidents. The concept of critical entities spans sectors such as energy, transportation, banking, health, water, digital infrastructure, space, and food production. Estimated week of presentation: 38/2024 (previous estimate; to be updated).

Amendment to the Act on the Environmental Damage Fund: The proposal aims to clarify the transitional provisions of the Act on the Environmental Damage Fund (1262/2022), repealing the Act on the Oil Pollution Compensation Fund (1406/2004) and the Environmental Damage Insurance Act (81/1998). Clarifications are considered necessary to ensure the proper processing of the final financial statements of the Oil Pollution Compensation Fund and to ensure that the provisions concerning the Finnish Environmental Insurance Centre and its members’ liability, as well as the provisions that govern the Environmental Insurance Board, are applied during the transition period as intended by the Act on the Environmental Damage Fund. Estimated week of presentation: 41/2024.

Government proposal for acts amending the Act on Environmental Protection in Maritime Transport and certain other acts, the Hong Kong Convention, and amendments to the MARPOL Convention and the London Protocol: The proposal includes amendments to the Act on Environmental Protection in Maritime Transport (1672/2009) to introduce ship emission bans in Finnish territorial waters, supplementary regulations for the FuelEU Maritime Regulation and the Distribution Infrastructure Regulation, and the approval of the Hong Kong Convention and amendments to the MARPOL Convention and the London Protocol. National provisions related to these international obligations will also be included in the Act on Environmental Protection in Maritime Transport and certain other acts. Estimated week of presentation: 42/2024.

Single point of contact for net-zero technology projects: The proposal will establish the Eastern Finland Regional State Administrative Agency as the national centralised one-stop shop in accordance with Article 6 of the Regulation (EU) 2024/1735 of the European Parliament and of the Council of 13 June 2024 on establishing a framework of measures for strengthening Europe’s net-zero technology manufacturing ecosystem and amending Regulation (EU) 2018/1724 (i.e. the Net Zero Industry Act, NZIA). The proposal will also lay down the obligation for the relevant public authority to notify the contact point, the contact point’s right of access to information, and priority for strategic projects. The provisions will be added to the Act on the Processing of Environmental Protection and Water Matters by Regional State Administrative Agencies (898/2009). Estimated week of presentation: 50/2024.

Amendment to the Act on Production Subsidy for Electricity Produced from Renewable Energy Sources: Trading in the electricity market is transitioning from hourly intervals to 15-minute intervals in 2025. Since the Act on the Production Subsidy for Electricity Produced from Renewable Energy Sources (1396/2010) uses the term “hour” in some places, minor technical changes are necessary to avoid ambiguities in interpretation. Estimated week of presentation: 4/2025.

Preliminary details about the spring session 2025 (February 2025 to August 2025)

Significant proposals are expected for the spring session, including a state regional administration reform that aims to standardise permit and supervision practices and streamline permit processes by consolidating tasks into a new multidisciplinary agency, merging the National Supervisory Authority of Welfare and Health, the Regional State Administrative Agencies, and relevant tasks included in the environmental responsibilities of the Centres for Economic Development, Transport and the Environment (ELY Centres).

In addition, several proposals will be expected regarding the implementation of the revised Renewable Energy Directive (EU) 2023/2413 (RED III), reforms of land use planning legislation, the possibility to amend valid environmental permits on environmental protection authorities’ initiative, and the implementation of extended producers’ responsibilities regarding batteries.

If you have any questions about this Legal Alert, please feel free to contact the undersigned or your regular Borenius contact.