The European Commission has approved a €2.3 billion Finnish scheme to support investments in strategic sectors and help industrial companies decarbonize their production processes. This scheme contributes to the priorities of the European Commission for 2024-2029, focusing on investments in clean energy and technologies as outlined in the Political Guidelines. It was approved under the Temporary Crisis and Transition Framework (TCTF) adopted on 9 March 2023 and amended on 20 November 2023 and 2 May 2024.
The Finnish Measure
Finland notified the Commission, under the TCTF, of a €2.3 billion scheme consisting of three measures. This scheme complements a €400 million Finnish scheme adopted on 13 December 2024 (SA.113721) to help companies decarbonize their production processes and support investments in strategic sectors.
The first measure supports investments in the production of energy from renewable sources (excluding electricity generation), storage of electricity or thermal energy, and storage of renewable hydrogen, biofuels, bioliquids, biogas, biomethane, or biomass fuels (accelerated renewable energy and storage rollout measure).
The second measure supports decarbonization of industrial production processes by helping companies reduce their greenhouse gas emissions by at least 40% and/or reduce their energy consumption by at least 20% (decarbonization and energy efficiency measure).
The third measure supports investments for the production of strategic equipment (such as batteries, solar panels, wind turbines, heat pumps, electrolysers, and carbon capture usage and storage), as well as key components designed for the production of such equipment or related critical raw materials (measure for investments in strategic sectors).
The aid under the scheme will take the form of a tax credit. The scheme is open to all sectors except credit institutions and other financial institutions.
The Commission found that the Finnish scheme complies with the conditions set out in the TCTF. The aid (i) respects the maximum aid ceilings; and (ii) will be granted no later than 31 December 2025. Moreover, the aid under the accelerated renewable energy and storage rollout measure will only be granted to newly installed or repowered capacities. The aid under the decarbonization and energy efficiency measure will (i) be granted on 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 incentivize the production of relevant equipment for the transition to a climate-neutral economy.
Additionally, 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 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 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 decarbonization of industrial processes (section 2.6). Member States can support investments in decarbonizing industrial activities to reduce dependency on imported fossil fuels, particularly through electrification, energy efficiency, and the switch to renewable and electricity-based hydrogen that meets certain conditions, with expanded possibilities to support decarbonization 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 (such as batteries, solar panels, wind turbines, heat pumps, electrolysers, and carbon capture usage and storage), as well as for the production of key components and for the 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 cohesion objectives are duly considered. 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 todays decision will be made available under the case number SA.114934 in the State aid register on the Commissions 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.