Finland Accelerating Green Transition Investments by Further Streamlining the Permitting Processes

Authors: Minna Juhola and Noora Britschgi

Two draft government bills regarding legislation on the renewal of the state regional governance and the so-called one-stop shop have been published for hearings. The aim of the upcoming reform is to streamline the permitting processes and to unify the permitting and supervisory practices to foster the green transition and investments, which are crucial for enhancing Finland’s competitiveness.

New Permit and Supervisory Authority (VALO)

In connection with the reform, National Supervisory Authority for Welfare and Health (Valvira), the Regional State Administrative Agencies (AVI), and units managing environmental affairs at the Centres for Economic Development, Transport and the Environment (ELY Centres) would be merged to form the new Permit and Supervisory Authority (VALO) with national competence, as presented in the draft government bill regarding the renewal of the state regional governance.

In the combined model, the new authority would mainly handle the duties under the Environmental Protection Act (527/2014), the Land Extraction Act (555/1981), the Act on the Environmental Impact Assessment Procedure (252/2017), the Water Act (587/2011), the Waste Act (646/2011), the Nature Conservation Act (9/2023) and the Act on the Organisation of River Basin Management and the Marine Strategy (1299/2004).

The Act on Handling of Certain Environmental Issues at the Permit and Supervisory Authority

Furthermore, the second draft government bill proposes to enact new law on the handling of certain environmental issues at the Permit and Supervisory Authority (“Draft Government Bill”). Going forward, the environmental permits, water permits, and also the exemption permits under Nature Conservation Act, which are processed jointly with the environmental and/or water permit applications, could be handled electronically in a single permitting process in the so-called one-stop shop, the Permit and Supervisory Authority.

The Draft Government Bill also lays down the key provisions for the boosting of the green transition environmental permitting, including inter alia a priority fast-track system for certain projects and time limits for handling of the permits within the authority.

Priority for Certain Strategic and Green Transition Projects

Pursuant to the Draft Government Bill, priority over other permit applications would be granted to environmental permits, water permits, or permits resolved in the joint processing by the Permit and Supervisory Authority of strategic projects under the Critical Raw Materials Act (EU) 2024/1252 and the proposal for the Net-Zero Industry Act. Furthermore, the current temporary priority for certain green transition projects’ permitting process would be prolonged from 2026 until 2030, and a priority would be issued for the said permit applications of the following green transition projects:

• renewable energy plants and offshore wind power and related water management projects;
• industrial projects replacing the use of fossil fuels or raw materials based on renewable energy or electrification;
• manufacturing and utilisation of hydrogen, with the exception of the production of hydrogen from fossil fuels;
• carbon capture, storage, and utilisation; and
• battery factory and production, recovery, and reuse of battery materials.

In addition, as a novelty to the existing priority rights, a priority would also be issued to

• data centres, the majority of the produced waste heat of which is being utilised.

However, the applicant must also prove that the green transition project is in line with the “Do No Significant Harm” principle (DNSH). In accordance with the existing regulation, priority would mean, in practice, the processing of the applications as urgent in the so-called fast-track system by the permitting authority at all stages of the process.

Time Limits for Permitting Procedures

The maximum processing periods for renewable energy projects are currently regulated in the Act on Permit Granting Processes and Certain Other Administrative Procedures for Renewable Energy Plants (1145/2020) (in Finnish: uusiutuvan energian lupamenettelylaki) pursuant to which the key permit processes, including environmental permit, water permit, and building permit processes, but excluding e.g. expropriation permit process and EIA, must be resolved within two (2) years in case of new renewable energy projects and within one (1) year in case of all renewal of existing power plants and new projects with small-scale electricity generation capacity.

Furthermore, based on the new Draft Government Bill, a target handling period of one (1) year would also be provided for environmental permits, water permits, or permits resolved in the joint processing permit matters of the green transition projects 2) – 6) listed above. The calculation of the target processing time would start from the moment the permit applications are publicly announced and can therefore be considered complete, i.e. when any necessary supplements to the application have also been requested by the permit authority. The new permit authority would also be obliged to issue a public estimate on the handling time of the permitting process.

At the same time, until the end of 2032, the Finnish Administrative Courts would have an obligation to prioritise and hasten the handling of appeals that have been filed against permits resolved under the priority process.

EIA to Be Conducted in All Industrial-Scale Wind Farm Projects

Within the legislative amendment process, the Act on the Environmental Impact Assessment Procedure, (“EIA”) is planned to be updated to cover all industrial-scale wind farm projects. Currently, the EIA process is required for wind farm projects which consist of at least 10 WTGs or the total output of which is at least 45 MW. Pursuant to the Draft Government Bill, the limit for the EIA process would be lowered so that the EIA process would be required for wind farm projects with at least 7 WTGs and/or for the total output of 45 MW. Additionally, the EIA process may still be required on a case-by-case basis for wind farm projects considered to cause significant adverse impacts on the environment.

Next Steps

The new legislation regarding the state regional governance and the one-stop shop are to enter into force on 1 January 2026.

The ministries welcome all feedback on the draft government bills. The deadline for providing feedback on the proposed draft government bill regarding the renewal of the state regional governance is 1 September 2024, and the statement request is available here.

The deadline for providing feedback on the draft government bill regarding the one-stop shop is 30 August 2024, and the statement request is available here.

The Environment and Natural Resources Team at Hannes Snellman is closely monitoring the development of environmental administration and environmental legislation. The team is available to discuss any permitting and regulation related questions.