Finland’s “Turnaround in Framework Crisis: Government Offers Tax Relief for Green Investments

The Finnish government has reversed its stance on the framework crisis and has decided to attract clean investments with tax relief. Experts interviewed by HS have praised the decision, stating that it should have been made earlier. Ulla Heinonen, director of green growth at the Confederation of Finnish Business, believes that competition with other countries is ongoing, and the sooner these investments can be brought back to Finland, the better.

Heinonen also mentions that the coming months will determine whether Finland will attract factories using fossil-free energy, such as battery production, clean steel, and hydrogen. The government has decided to offer a tax credit for large industrial investments leading to a zero-emission economy, with a refund of 20% of the total investment amount for projects whose investment decision is made by the end of next year, with a maximum tax credit of 150 million euros per project.

Paavo Järvensivu from the Bios research unit expressed disappointment that Finland has not taken an active industrial policy approach earlier. He believes that Finland’s political leadership has lacked a planned line to reform the industry to meet economic, ecological, and geopolitical goals. Järvensivu sees the government’s decision as a step in the right direction, allowing the renewing industry to invest and compete against older polluting industries.

There have been concerns about Finland attracting green investments without offering financial support as other countries like the United States, Germany and France provide support for such projects. Ulla Heinonen from Confederation of Finnish Business notes that Finland may need to react to this competitive challenge or risk losing out to other countries. Järvensivu emphasizes