3 reasons why Finland is an attractive destination for green business
A substantial majority, close to 90 %, of Finnish people say nature is important to them. Therefore, it should not come as a surprise that Finland is a committed forerunner in the green transition, with a strong backing from its government, infrastructure, and industry.
News 21.11.2023
For the third time in a row, Finland ranked first in the UN Sustainable Development Index in 2023. The esteemed index shows that Finland has come furthest in achieving the 17 UN Sustainable Development Goals. Affordable green energy is one of these and something, which Finland has already achieved.
What other facts make Finland an excellent place for setting up your green business?
1. Long-term commitment from the Finnish government and the EU
With a strong start, Finland’s path towards environmental sustainability is ongoing. To face climate challenges ahead, the Finnish government has set the ambitious target of becoming carbon neutral by 2035 – a full 15 years before most other European countries and the EU as an entity. Many Finnish cities have set their goals even higher: Helsinki, Tampere, Turku, Lahti, Espoo, and Lappeenranta all strive to be carbon neutral by 2030.
The Finnish government has set the ambitious target of becoming carbon neutral by 2035.
To accelerate green investments, the Finnish government has agreed on giving green transition projects priority treatment in 2023-2026. During this period, projects relating to renewable energy production, industrial electrification, hydrogen, carbon capture, battery production and similar endeavors are granted quicker processing times in permit applications. In early 2023, the Finnish government also adopted a new hydrogen strategy, which set the target of producing one million tons of pure hydrogen by 2030 – a tenth of the EU’s goal of ten million tons.
The EU supports Finnish companies’ sustainability actions by targeted funding. During 2021-2023, the EU’s recovery and resilience facility granted Finnish companies EUR 530 million through the Sustainable Growth Program for Finland. Another EU-backed investment comes from Luxembourg: the country will provide EUR 40 million in funding for solar power projects built in Finland through the EU’s new renewable energy financing mechanism. The renewable energy will statistically belong to Luxembourg, one of the smallest countries in the world, but Finland will benefit from the generated energy in practice.
2. Accessible and affordable clean energy
Finland’s clean and advanced energy infrastructure is key in enabling the green transition. In 2022, 89 % of Finland’s energy production was based on clean energy, with estimates showing a growth to 93-94 % in 2023. Further pushed by the ongoing energy crisis, Finland’s energy mix is not only green, but also increasingly based on renewable energy. As much as 2,430 MW of wind power was built in Finland during 2022 – a capacity increase of 75 %!
For long, solar power in the North seemed unfeasible, but the surprising truth is that solar panels work better in cold weather and Finland gets roughly as much sunshine as countries like Germany and Denmark. Currently, the installed base of photovoltaic plants is increasing in Finland and according to the Finnish transmission system operator Fingrid, the country’s solar power capacity will reach seven gigawatts in 2030 (in 2023, Finland’s overall power generation capacity is around 20 GW).
Finland’s energy mix is not only green, but also increasingly based on renewable energy.
The Finnish main grid currently consists of 14 400 kilometers of transmission line and over the next ten years EUR 4 billion will be put in its development to cater to growing energy production and consumption. The electricity in Finland is clean and considerably cheaper than in Central Europe – for non-household consumers Finnish electricity prices are among the lowest in Europe.
3. Masters of green knowhow
Finland’s industrial segment is heavily invested in creating products and services enabling the green transition. Among Finland’s green transition forerunners are, for instance, green technology heavy-hitters, such as Wärtsilä, and green startups and scaleups, such as Capalo AI, P2X, Kapacity.io, Cactos, Virta, and AW-Energy – only to mention a few. The currently pipeline of green investments in Finland amounts to 200 billion euro, which includes projects from both Finnish and multinational companies.
Finland hosts several industry clusters that focus on sustainability. One example is EnergyVaasa, which is the largest energy technology hub in the Nordic countries. This cluster operates globally and consists of 180 companies with a combined annual turnover of EUR 6 billion. Important are also Finland’s battery ecosystem and Hydrogen Cluster Finland, which aims to create a hydrogen value network of companies and industrial organizations throughout the country.
Finland has a strong base of engineers, researchers, and digitally skilled professionals – all essential for the transformation.
The Finnish workforce is highly educated and digitally skilled, ranking Finland first in the EU’s Digital Economy and Society Index. Every fifth employee in Finland works in a ‘green job’. These jobs are characterized by degrees in higher education and cognitive non-routine skills. The green transition especially affects work in the process industry, construction, and energy. Luckily Finland has a strong base of engineers, researchers, and digitally skilled professionals – all essential for the transformation. More professionals are also being trained in Finnish classrooms around the country: sustainability studies and programs are offered in several levels of the education system in order to ensure talent with future-proof sustainability skills.