Legal Alerts/3 Jan 2025
Permitting Clean Transition Investments Streamlined
The Finnish Parliament has enacted significant amendments to the Building Act before it initially entered into force on 1 January 2025. These amendments resulted from stakeholder feedback following extensive preparatory work on reforming building legislation which led to the separation of the Building Act from the former Land Use and Building Act, with the intention of completing the reform of land-use legislation later.
To foster the transition towards the decarbonisation of energy production and industries, a locating permit for clean transition was introduced. This will considerably expedite clean transition investments by bypassing the zoning process, often taking several years especially if appealed, with a permit consideration of a few months and simultaneously narrowing the parties with the right to appeal. Further, the locating permit for clean transition seems to allow for an enforcement order to commence building operations despite potential appeals, a provision not available for building permits based on a local detailed plan that is under appeal.
The scope of the locating permit includes:
- renewable energy production except for wind and solar power
- projects to substitute fossil fuels or raw materials in industries by renewable energy or electrification
- manufacturing and utilisation of hydrogen (excluding manufacturing from fossil fuels)
- carbon capture, storage and utilisation
- manufacturing of batteries, manufacturing, recovery and reuse of battery materials
- clean transition investments in processing industries in the acceleration valleys referred to in EU’s Net Zero Industry Act
- projects implemented in renewables acceleration areas referred to in Renewable Energy Directive in the line with the conditions issued for such areas excluding wind and solar power
- data centres where a major part of the waste heat is being utilised
Applying for a locating permit for clean transition will necessitate an impact assessment comparable in scope to that required for local detailed plans. Depending on the scale of the project, both direct and indirect impacts on the following areas must be reported:
- human living conditions and living environment
- soil and bedrock, waters, air and climate
- flora and fauna, biodiversity and natural resources
- regional and community structure, socio-economics, energy economy and transport
- townscape, landscape, cultural heritage and built environment
- favourable conditions for competition in business
The statutory handling time of the locating permit for clean transition is six months from submitting a sufficiently complete application.
The right of appeal is granted to concerned parties, such as neighbours and public authorities. Environmental NGOs may appeal only if the project is subject to an EIA procedure. The right of appeal is significantly more limited compared to zoning processes, where e.g. all municipal residents can appeal.
To secure a locating permit for clean transition projects, applicants must meet specific criteria that ensure environmental responsibility and community compatibility. Among the more detailed criteria, the project site must be appropriately sized and free from environmental risks like flooding. The design should blend with the local landscape and adhere to high architectural standards. Infrastructure, such as access roads and water management systems, must be sufficient and not impose undue costs on local authorities. Additionally, projects should not negatively impact neighbours or hinder future development. For facilities handling hazardous materials, the location must be suitable within the context of existing and planned land uses. These requirements ensure that developments align with Finland's sustainable growth objectives.
Changes to the Building Act reflect Finland's commitment to sustainable innovation, reducing administrative burden and aligning with European directives, to take purposeful steps towards the clean transition.
If you have any questions about this Legal Alert, please feel free to contact the undersigned or your regular Borenius contact.
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