Key Features of Land Use Planning Requirements in Finnish Hydrogen Projects

Many hydrogen projects are currently in the development phase, where the questions regarding land use planning are topical. However, due to the rapid progression of hydrogen economy, the current regulatory framework does not unequivocally take into account all special characteristics of hydrogen projects and thus, provide clear provisions guiding their land use planning. More guidance on the interpretation of the applicable legislation has been received as the Finnish Chemical and Safety Agency Tukes published on 23 January 2024 a handbook on the safety of handling and storing hydrogen, in addition to which the Finnish Administrative Court issued on 11 December 2023 a ruling regarding land use planning of hydrogen projects.

Recent Developments in the Authority Guidance Regarding Land Use Planning and Placement of Hydrogen Projects

The current Finnish regulatory framework does not provide separate specific legislation for hydrogen and thus, hydrogen is under the current regulatory framework considered a dangerous chemical similarly to other flammable gases. Due to the above, the existing land use and building legislation and the chemical safety legislation are applicable to hydrogen projects and guide their land use planning and placement. It should be noted, however, that the authority practices for hydrogen projects are still developing and therefore, close cooperation with relevant authorities and stakeholders is required to ensure efficient project development.

As an example of developing authority practices, Tukes has recently provided further guidance on the interpretation of land use planning requirements in its handbook on the safety of handling and storing hydrogen published on 23 January 2024. In respect of large-scale hydrogen production facilities, Tukes recommends using the plan symbol T/kem, which represents an industrial and storage area where a significant facility producing or storing dangerous chemicals is either placed or may be placed, to indicate an area where such facility may be located. Additionally, plan symbols such as T (industrial and storage area), TT (area for industrial operations with significant environmental impacts), and EN (energy supply area) could also be used to indicate suitable locations for hydrogen production facilities. In addition to the aforementioned, other plan symbols may potentially be used as well, provided that the municipality handling the land use planning supports the placement of a hydrogen production facility in the specified area and plan provisions of the respective plan allow for such placement. Furthermore, Tukes has emphasised the importance of considering the plan symbols of the surrounding areas when assessing potential locations for a hydrogen production facility. It is required that the use of any adjacent properties in accordance with the applicable plan must not be endangered, and any consequences of potential accidents shall be limited to the area of the hydrogen production facility. Therefore, the mere fact that the plan enables the placement of a hydrogen production facility does not guarantee that it could actually be placed in the contemplated location.

Regarding small-scale hydrogen projects, such as hydrogen refuelling stations, Tukes states that plan symbols may vary. A plan symbol enabling the placement of a conventional refuelling station could also enable the placement of a hydrogen refuelling station. However, due to the higher risk of fire and explosion hazards, hydrogen refuelling stations would not be suitable in, for example, dense urban environments or nearby sensitive places, such as nursing homes, schools, and business centres. Furthermore, it is required that the hydrogen refuelling station operations do not conflict with the plan regulations of the contemplated locations. Additionally, these operations must not restrict the use of any adjacent properties in accordance with the applicable plan.

In respect of the legislation relating to the plan symbols and provisions, it should be noted that, in connection with enacting the Act on the Built Environment Information System (in Finnish: Laki rakennetun ympäristön tietojärjestelmästä), certain changes were made to the Land Use and Building Act provisions concerning the form of land use planning that entered into force on 1 January 2024. According to the amended provisions, a local detailed plan consists of the plan targets (in Finnish: kaavakohde) and plan provisions, and the previously used plan symbols are withdrawn and replaced by the plan provisions. However, the practical implications of these changes are not major.

Sufficiency of Surveys and Studies and Impact Assessment

The Administrative Court of Eastern Finland has in its legally valid ruling (No. 2765/2023) issued on 11 December 2023 assessed land use planning requirements of a hydrogen facility planned to be constructed in the city of Joensuu. The city council of the city of Joensuu had on 29 May 2023 approved a local detailed plan and local detailed plan amendment regarding Kontiosuo waste centre area in which some areas were reserved for a renewable hydrogen and synthetic methane production facility with plan symbol T/kem representing an industrial and storage area where a significant facility producing or storing dangerous chemicals is either placed or may be placed. A group of nearby landowners appealed against the city council’s decision requiring that the Administrative Court revoke the local detailed plan and local detailed plan amendment, inter alia, due to insufficient assessment of the area’s suitability for a T/kem area. The Administrative Court revoked the local detailed plan and local detailed plan amendment with respect to the areas that were subject to the appeal.

The Administrative Court considered in its ruling that, due to the insufficient surveys and assessment of the impacts of the activities enabled by the plan symbol T/kem, it is not possible to assess whether the local detailed plan and local detailed plan amendment in question fulfils the requirements for a local detailed plan set out in the Land Use and Building Act. The Administrative Court stated that the plan symbol T/kem allows placing such activities in the planning area that can cause risk for major accident and thus, the possible effects to the other activities of the nearby areas may be remarkable. Furthermore, the Administrative Court considered that the respective T/kem plan provision did not regulate what or what kind of facility producing or storing dangerous chemicals may be placed in the planning area, and the preparatory materials concerning the local detailed plan did not include detailed information of the impacts of the activities enabled by the plan symbol T/kem. The Administrative Court concluded in this case that reserving areas with a plan symbol T/kem in the local detailed plan requires information of the impacts and their assessment given the nearby residential areas as well as a power plant that already exists in the area.

The requirement to assess the impacts stems from the Land Use and Building Act, according to which a plan shall be based on planning that evaluates significant impacts of the plan as well as on the respective studies and surveys required to meet this prerequisite. The function and purpose of the plan are considered when assessing the impacts of the plan. Studies and surveys shall be conducted covering the entire area in which the plan is expected to have significant impacts. The impact assessments are conducted with the objective of determining whether the proposed land use in the plan may be implemented in the targeted area, considering the content requirements set forth for a local detailed plan in the Land Use and Building Act. For clarity, it should be noted that according to the Land Use and Building Act, a local detailed plan’s conformity with law does not depend on the absence of any impacts resulting from the plan’s implementation within the plan area or its surroundings. As the Administrative Court stated in its decision, the studies and surveys must be drawn up in such a way that allows assessing whether the local detailed plan’s content requirements are met in respect of, for example, health and safe living environment. Furthermore, the prerequisites of the land use related to the change in the land use must be reviewed with regard to such activities which impacts shall be later assessed during the environmental impact assessment procedure.

What to Pay Attention To

Given the fact that the regulatory framework and the related authority guidance and established practices concerning the land use planning of hydrogen projects are still taking shape, close cooperation with the relevant authorities, including the municipality, Tukes, and a local rescue authority, is a key to ensure efficient project development.

Furthermore, project developers should pay attention to details when participating in hydrogen projects’ planning processes. Careful preparation of the background information, surveys, and impact assessments as well as close cooperation between the project developer, authorities, and consultants foster the quality of the material required to assess whether the local detailed plan fulfils the requirements set out in the applicable laws. The project-specific circumstances shall be taken into account when evaluating the required level of details and information in each case, however, making sure that at least the minimum requirements stemming from the applicable laws are met. Due to hydrogen’s special characteristics, specific attention should be paid to the assessment of the hydrogen projects’ accident risk. Moreover, in light of the recent Tukes handbook and the Administrative Court’s decision, the appropriate plan provision allowing the placement of the planned hydrogen project in question shall be carefully considered.

Hannes Snellman advises clients on a regular basis with respect to, inter alia, the permitting, construction, operation, and financing of industrial projects. Our experts at Hannes Snellman are closely following the development of the hydrogen economy and the related legislative regime. Please contact us should you wish to discuss any related questions.