Finland will boost investment and reduce emissions using EU funding

Finland will use EU funds to accelerate emissions reduction and promote digitalisation through the development of 6G and artificial intelligence

Through the Sustainable Growth Programme for Finland, the Nordic country aims to boost investment, reduce emissions, and accelerate sustainable growth in the economy. In addition to this, the programme is expected to improve employment, health, and social services as well as research, development, and innovation.

Funding

According to a press release by the government, the estimated total for 2021-2023 is around EUR 2.1 billion at current prices. It must be noted that EUR 2.1 billion is a preliminary total and the funding from the EU’s Recovery and Resilience Facility will depend on the performance of the economy in 2021 and 2022. For this reason, the final amount will not be known for certain until the summer of 2022.

It has been estimated that half of the funding will be put towards promoting a ‘green transition’ and a quarter will be used for ‘digitalisation’.

The government further announced that the country will also receive additional funding for other programmes under the EU’s recovery package (Just Transition Mechanism and the European Agricultural Fund for Rural Development). Thus, the overall amount will be increased to a total of EUR 2.9 billion at current prices.

Green transition

As previously stated, investments in green transition will amount to approximately half of the total funding. More specifically, it is anticipated to account for approximately EUR 820 million at current prices; however, since other parts of the programme will also promote green transition, the overall sum is expected to be EUR 1,040 million at current prices.

The main goal of this investment will be to reduce emissions not only in Finland but also globally. According to the government’s website, the Minister of Finance Matti Vanhanen commented:

“The investments being made will accelerate emissions reduction measures in line with the low-carbon roadmaps for industrial sectors. The investments will potentially bring a substantial reduction of three million tonnes annually in Finland's carbon dioxide emissions. This equates to about six per cent of Finland’s emissions.”

It is important to note that in addition to having these environmental benefits, the green transition will also increase employment and create new study opportunities.

Digitalisation

This part of the programme provisionally includes funding of around EUR 220 million at current prices. However, when all other projects promoting digitalisation have been considered, the amount increases to a total of EUR 540 million at current prices – this sum accounts for a quarter of the total funding.

The government plans to improve productivity and make services more accessible to all through digitalisation. Taking this further, funding will be used to make transport more efficient, ensure faster internet connections, and develop 6G and artificial intelligence.

All of this is expected to have a positive and significant impact on travel, study, and work. As a result, productivity will undoubtedly increase.

Other investments

EUR 640 million and EUR 400 million at current prices will be allocated for ‘employment and skills’ and ‘health and social services’, respectively.

Addressing employment and skills, the government explained that work and study opportunities will be improved thanks to digitalisation and the aforementioned green transition. In addition to this, the health and social services reforms will make it easier and quicker for people to access the care and help that they need.

Once the government approves the final Recovery and Resilience plan on 30 April, the Ministry of Finance will submit it to the EU. After this, the European Commission will assess the plan and the Council of the EU will approve it in the summer.