Commission approves €2.3 billion Finnish State aid scheme to foster the transition to a net-zero economy

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The European Commission has approved a €2.3 billion Finnish scheme to support investments in strategic sectors and to help industrial companies to decarbonise their production processes. The scheme contributes to the achievement of the priorities of the European Commission for 2024-2029, based on the Political Guidelines, which call for investments in clean energy and technologies. The scheme was approved under the State aid Temporary Crisis and Transition Framework (‘TCTF’) adopted by the Commission on 9 March 2023 and amended on 20 November 2023 and on 2 May 2024.

The Finnish measure

Finland notified to the Commission, under the TCTF, a €2.3 billion scheme consisting of three measures. This scheme complements a €400 million Finnish schemeadopted on 13 December 2024 (SA.113721) to help companies decarbonise their production processes and to support investments in strategic sectors.

Under the scheme, the first measure will support investments in the production of energy from renewable sources (excluding electricity generation), electricity or thermal storage and storage of renewable hydrogen, biofuels, bioliquids, biogas, biomethane or biomass fuels (‘accelerated renewable energy and storage rollout measure’).

The second measure will support the decarbonisation of industrial production processes by helping companies to reduce greenhouse gas emissions from their production processes by at least 40% and/or reduce their energy consumption by at least 20% (‘decarbonisation and energy efficiency measure’).

The third measure will support investments for the production of strategic equipment (namely batteries, solar panels, wind turbines, heat-pumps, electrolysers and carbon capture usage and storage), as well as key components designed and primarily used as direct input for the production of such equipment or related critical raw materials necessary for their production (‘measure for investments in strategic sectors‘).

Under the scheme, the aid will take the form of a tax credit. The scheme will be open to all sectors, except credit institutions and other financial institutions.

The Commission found that the Finnish scheme is in line with the conditions set out in the TCTF. In particular, the aid under the scheme (i) will respect the maximum aid ceilings; and (ii) will be granted no later than 31 December 2025. Furthermore, the aid under the accelerated renewable energy and storage rollout measure will be granted only to newly installed or repowered capacities. The aid under the decarbonisation and energy efficiency measure will (i) be granted under the condition that the project must be completed within 36 months, and (ii) penalties will apply in case of delays. Finally, the aid under the measure for investments in strategic sectors will incentivise the production of relevant equipment for the transition to a climate neutral economy.

Furthermore, the measures will be subject to safeguards to limit undue distortions of competition, including ensuring that there is no risk of relocation of investments within the EEA.

On this basis, the Commission approved the aid measure under EU State aid rules.

Background

On 9 March 2023, the Commission adopted the TCTF to foster support measures in sectors which are key for the transition to a net-zero economy.

The TCTF provides for the following types of aid, which can be granted by Member States until 31 December 2025 in order to accelerate the green transition:

• Measures accelerating the rollout of renewable energy (section 2.5). Member States can set up schemes for investments in all renewable energy sources, with simplified tender procedures.
• Measures facilitating the decarbonisation of industrial processes (section 2.6). Member States can support investments in the decarbonisation of industrial activities with a view to reduce dependency on imported fossil fuels, in particular through electrification, energy efficiency and the switch to the use of renewable and electricity-based hydrogen which complies with certain conditions, with expanded possibilities to support the decarbonisation of industrial processes switching to hydrogen-derived fuels.
• Measures to further accelerate investments in key sectors for the transition towards a net-zero economy (section 2.8). Member States can grant investment support for the manufacturing of strategic equipment (namely batteries, solar panels, wind turbines, heat-pumps, electrolysers and carbon capture usage and storage), as well as for production of key components and for production and recycling of related critical raw materials. Support is capped at a certain percentage of the investment costs up to specific amounts, depending on the location of the investment and the size of the beneficiary. Higher support is possible for small and medium-sized companies, as well as companies located in disadvantaged regions to ensure that cohesion objectives are duly taken into account. Furthermore, in exceptional cases, Member States may provide higher support to individual companies, where there is a real risk of investments being diverted away from Europe, subject to a number of safeguards.

More information on the TCTF can be found here.

The non-confidential version of today’s decision will be made available under the case number SA.114934 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.