Finland accepted the Paris Agreement on 14 November 2016. Finland is part of the jointly submitted INDC of the European Union of at least 40% domestic reduction in greenhouse gas emissions by 2030 compared to 1990.

The national goal set out in the Climate Act (609/2015) is an 80 % reduction of emissions of human-caused greenhouse gases compared to 1990 by 2050. If an international treaty, which is binding on Finland, or EU law would require higher reductions, such higher goal would be followed instead.

The eventual national long-term goal set out in the National Energy and Climate Strategy for 2030, which was approved in 2016, is a carbon-neutral society. Finland’s goal is to be carbon neutral by 2035. To achieve this goal, the Climate Act is being revised and the Government proposition to Parliament concerning the reform should be completed during 2021. Additionally, the Government has started preparing a revised National Energy and Climate Strategy.

The Act on Prohibition of Coal for Energy Use (416/2019) entered into force on 1 April 2019. The said Act prohibits the use of coal as a fuel for the purposes of producing electricity or heat starting from 1 May 2029. There are certain limited discretionary exceptions to the prohibition relating to, inter alia, exceptional circumstances and security of supply.

Climate change legislation has been adopted, e.g., as part of the Land Use and Building Act (132/1999), such provisions concerning, e.g., energy efficiency and public transport.

Further, the Climate Act (609/2015) regulates climate policy planning and execution as well as the roles of governmental bodies therein.

Finland is a part of the EU emissions trading scheme. Emission trading is regulated at a national level in the Act on Emission Trading (311/2011).

The energy taxation in Finland is based on the EU Directives 2003/96/EC and 2009/28/EC.

The Act on Carbon Capture and Storage (416/2012) (the “Carbon Storage Act”) prohibits the geological and water column-based storage of carbon dioxide in Finland and in the exclusive economic zone of Finland. The prohibition, however, does not apply if the amount stored is less than 100,000 tons and the purpose of storing is research, development, and experimenting of new products or methods.

In addition, the Carbon Storage Act stipulates that carbon dioxide captured in the area of Finland may be transferred for geological storage only to such geological formations that are entirely located in the area of an EU member state or the exclusive economic zone or the continental shelf thereof as defined in the United Nations Convention on the Law of the Sea.

The Carbon Capture Act also regulates the flow of carbon dioxide, the responsibilities of the party capturing the carbon dioxide as well as the transfer network and the use thereof.

Further, the Environmental Protection Act (527/2014) regulates the environmental permits needed for carbon capture and storage. In addition, the Environmental Protection Act sets out an obligation for incinerators with a nominal output of at least 300 MW to include a survey of the possibility for carbon capture possibilities in their environmental permit application. If the prerequisites to carbon capture exist, the environmental permit shall stipulate that a suitable space for carbon capture and pressurizing equipment is reserved in the facility.

There have been two major state subsidy schemes for the production of renewable energy, that were introduced in 2010 and 2018. The schemes were based on competitive bidding processes, in which energy producers would submit bids and compete for being admitted into the scheme. Only one round of competitive bidding was organized for each subsidy scheme.

In the latest subsidy scheme, which was open for applications in late 2018, electricity producers that met certain eligibility criteria set out in the Act on the Subsidies for Renewable Energy (1397/2010) were able to attend in the competitive bidding processes, where the producers bid for the level of support (called a premium) they required to produce a certain annual amount of renewable electricity. Eligible tenderers offering the lowest premiums were approved to the premium scheme until the accepted offers filled the available auctioned capacity, i.e., 1.4 TWh. Based on the bidding process, seven (7) projects from six (6) different producers were approved into the scheme, with an average premium of EUR 2.49 per MWh over the reference price of EUR 30 per MWh.

The previous subsidy schemes are no longer open for tenders, and currently, there is no information about new subsidy schemes being opened.

Energy efficiency in the built environment is regulated mainly in construction legislation, in which, e.g., certain requirements for the energy efficiency of new buildings have been set out. Further, various other regulations are laid down in national acts and governmental decrees. In addition, the Energy Certificate Act (50/2013) requires all new buildings and buildings that are being sold or leased out to have an energy certificate, in which the energy efficiency level of the building in question is presented.

Further, the amendments made to the EU Directive on the Energy Performance of Buildings (2010/31/EU) in 2018 (by EU directive 2018/844)  were implemented in Finland in 2020. The main changes to national legislation were, for example, the charging infrastructure of electric vehicles, automation and control systems of buildings. For example, the Government submitted a Proposition to Parliament concerning the housing associations’ obligation to build electric charging stations in their premises in connection with major renovations.

Finally, the National Energy and Climate Strategy set outs various forward-looking measures, which also concern energy efficiency in the built environment.

In accordance with the relevant EU legislation (particularly the EU Directive on the Promotion of the Use of Energy From Renewable Sources, 2009/28/EY), legislative measures relating to, e.g., promotion of the use of biofuels in transport have been taken in Finland. For example, the sustainability criteria for biofuels are regulated in the Act on Biofuels and Bioliquids (393/2013).

Further, the Act on the Promotion of Use of Biofuels (446/2007, as amended) sets out certain requirements aimed at distributors of transport fuels, according to which a specific portion of the fuels distributed must be biofuels. Currently, it is required that 18% of the energy content of all motor gasoline, diesel and biofuels distributed for consumption consists of biofuels. The required percentage is increased gradually each year, and in 2029 the said share of biofuels is targeted to be 30%. In 2021 the Government submitted a Proposition to Parliament where it is proposed that the national distribution obligation is extended to biogas and electric charging stations.

In addition, there is national legislation in force concerning, for example, the taxation of liquid fuels, according to which the amount of excise tax collected for liquid fuels is based on the energy content and specific CO2 emissions of the fuel.

As set out above, the EU Directive on Establishing a System of Greenhouse Gas Emission Allowance Trading Within the EU (2003/87/EC) has been implemented in Finland with the Act on Emission Trading (311/2011). Further, the State of Finland and representatives of certain industry fields have entered into voluntary agreements concerning energy efficiency. Such agreements set out action plans specific for each field of business, and the purpose of the agreements is to promote the fulfillment of international energy efficiency obligations.

In addition to the EU wide LULUCF Regulation, which is directly applicable also in Finland, the National Energy and Climate Strategy highlights, for example, the use of agriculture-based by-product biomass in energy production and the development of closed nutrient systems in agriculture as means to reduce GHG emissions in the field of agriculture.

The Energy Efficiency Directive (2012/27/EU) has been implemented in Finland by the Act on Energy Efficiency (1429/2014, as amended). The Act on Energy Efficiency regulates, for example, the promotion of combined production of heat and power as well as metering of energy consumption.

Further, as set out above, the use of coal as a fuel for the purposes of producing electricity or heat will be prohibited starting from 1 May 2029. In addition, the National Energy and Climate Strategy of the Finnish Government set out various other targets, such as increasing the annual production of wind power to 9 TWh by 2025.

There is no specific national-level regulation aimed at national financial institutions requiring them to reduce the GHG emissions of their customer. However, some of the major Finnish banks and asset management companies have voluntarily announced that they have joined various pro-climate investor initiatives and charity programs, such as Climate Action 100+ and CDP.

There have been no litigations in Finland that would have been profiled specifically as climate change litigations. This is largely due to the fact that, for example, the strategic decisions made by the Government of Finland in the fields of energy and climate cannot be appealed against, nor can individual persons generally sue governmental bodies based on, e.g., non-compliance with climate change policies.

Various pieces of legislation amended or introduced in recent years have included provisions that relate to, e.g., energy efficiency or other aspects relating to climate change. For example, the Land Use and Building Act (132/1999)  was updated in December 2020, and energy efficiency has been taken into account in the new act’s provisions. The Land Use and Building Act is currently undergoing another update and the Government Proposition to Parliament should be finalized in 2021. One of the new act’s aims is to contribute to creating a carbon-neutral society.

Finland is currently also preparing various national policies and/or strategies that relate to climate change mitigation (e.g. national hydrogen strategy and strategic program for circular economy). One major change is implementing the European Green Deal to the national legislation.