Finland’s recovery and resilience plan

RRF FUNDED PROJECTS IN FINLAND

WHAT’S IN THE PLAN?

The reforms and investments in Finland's plan are helping it to become more sustainable, resilient and better prepared for the challenges and opportunities of the green transition and digital transition. Following Council approval of Finland’s plan on 29 October 2021, as amended on 14 March 2023, Finland’s recovery and resilience plan was updated on 8 December 2023 introduce measures that address REPowerEU objectives.  

• 40 investment streams and 19 reforms
• 52.3% of the plan will support climate objectives 
• 28.9% of the plan will foster the digital transition.

The transformative impact of Finland’s plan is the result of a strong combination of reforms and investment which address the country’s specific challenges.  The reforms address bottlenecks to lasting and sustainable growth, while the investments aim to accelerate the digital transformation, research and investment in the green transition, to promote employment and skills improvement, and to improve access to health care and social services across the country.    

All measures have to be implemented within a tight time frame, as the Regulation establishing the Recovery and Resilience Facility requires all milestones and targets within the national plans to be completed by August 2026.  

Finland’s plan now includes one reform and three investments to reduce its reliance on fossil fuels, in line with one of the REPowerEU Plan's objectives.

To finance this increased ambition, Finland has asked for a share of its Brexit Adjustment Reserve to be transferred to the plan, amounting to €14.2 million. These funds would be added to Finland’s REPowerEU grant of €113 million.

Key measures for REPowerEU

The REPowerEU Chapter further strengthens the green dimension of the Finnish plan. The reform included in the chapter aims at establishing a single review procedure and a new single national authority for processing environmental permit applications. The three new investments focus on new clean technologies for energy production and use, as well as research and development activities to promote renewable energy solutions. The preparatory phase of an offshore wind power project in the Åland autonomous region will also be supported.  These measures are expected to contribute to achieving the Union’s 2030 climate targets, Finland’s goal of achieving carbon neutrality by 2035, as well as the goal of increasing the share of renewable energy sources in Finland’s energy mix.

Finland has set an ambitious target of achieving carbon neutrality by 2035. Substantial reforms and investments are required to put the country on track towards the achievement of this goal. This concerns in particular the sectors that currently have the highest emissions including energy, housing, transport and industry.

Key measures for the green transition

• Finland's recovery and resilience plan includes an amendment to the Climate Act, which will anchor the country's ambitious 2035 target into law.
• A reform of the Waste Act will increase the targets for recycling and reuse.
• The phase out of coal use in energy and a reform of energy taxation will contribute to promoting cleaner technologies.
• The plan supports the green transition through investments of €319 million in decarbonisation of the energy sector, namely in energy transmission and distribution and in new energy technologies.
• €136 million will be invested in low-carbon hydrogen along the hydrogen value chain as well as in carbon capture, storage and recovery.
• On green transportation, €13.6 million will be invested in supporting private and public charging points for electric cars, gas charging and refuelling infrastructure.
   

The modified plan, including the REPowerEU chapter, has further strengthened the focus on the plan on the green transition, devoting 52.3% of the available funds to measures that support climate objectives (up from 50.3% in the original plan).

Promoting the digital transition is a cross-cutting theme across the Finnish plan. Digital challenges for Finland focus on the need to realise the transformative potential of digitalisation. This includes upgrading rail traffic management system, extending the coverage of broadband connections, digitalising healthcare and employment services, increasing the level of digitalisation and automation in business, and raising the level of investment in research, development and innovation.

Key measures for the digital transition

• Finland’s recovery and resilience plan supports the digital transition with investments and reforms amounting to €32 million in high-speed broadband infrastructure across Finland.
• The plan supports with €85 million the Digirail project to introduce the European Rail Traffic Management System on the entire national railway network by 2040, along with the 4G and 5G-based Future Railway Mobile Communication System. 
• Digital innovations for social welfare and health care services are supported with €100 million, investments in continuous learning with €32 million and investments in accelerating key technologies (microelectronics, 6G, artificial intelligence and quantum computing) with €25 million.
• The plan envisages a €20 million support for streamlining work- and education-based immigration and facilitating international recruitment.  

The modified plan has further strengthened the focus on the plan on the digital transition, devoting 28.9% of the available funds to measures that support digital objectives (up from 27.5% in the original plan).

Key challenges for Finland’s economy include raising the country’s employment rate, addressing structural long-term unemployment, and enhancing skills to match market demands. Higher levels of investment in research and innovation and digitalisation are needed to increase productivity and competitiveness. Improving access to health and long-term care services, including promotion of e-health, is key to strengthening social resilience.

Key measures in reinforcing economic and social resilience

• The plan reinforces economic and social resilience by allocating €90 million to the reform of the Public Employment Services to increase the employment rate.
• Through its recovery and resilience plan (RRP), Finland plans to invest EUR 371.8 million (20.4% of the RRP’s total budget) to clear the backlog in social and health services due to COVID-19 and to foster equal access, strengthen primary healthcare, overhaul service delivery models and increase digitalisation of the health system.
• The plan allocates €254 million to research, development and innovation related to the green and digital transition.

More information on the event can be found here

Finland’s plan is consistent with the challenges and priorities identified in the European Semester, the annual cycle of coordination and monitoring of each EU country’s economic policies. For a detailed explanation of the European Semester see the following link: The European Semester explained | European Commission (europa.eu)

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