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Act on compensating for indirect emissions trading costs into force

Ministry of Economic Affairs and Employment
Publication date 24.5.2017 13.50
Press release

The Act on the compensation of the indirect costs of emissions trading enters into force on 1 June 2017. The key objective of the Act is to compensate the electricity-intensive industry for the indirect costs arising from emissions trading.

The Act entered into force by a Government Decree issued on 24 May 2017. The President of the Republic signed the Act in February 2017, but its entry into force required the Commission’s approval for the State aids included in it. The Commission approved Finland’s notification concerning these State aids on 5 April 2017.

By virtue of the Act aid may be paid to compensate sectors that are exposed to a significant risk of carbon leakage for the rise in electricity price. The sectors specified in the Act may be eligible for State aid. The amount of the aid depends on the price of emission allowances and electricity consumption of the beneficiary or the volumes produced.  

The electricity-intensive industries eligible for the aid include many sectors that are highly significant for Finland, such as the production of iron, steel and ferroalloys, paper and paperboard, mechanical wood pulp, and fertilisers. 

The Government has also adopted a decree that issues further provisions on the application procedure and the calculation and granting of the aid, issuing the aid decision, approval and obligations of the verifier, verification, and provision of information to the Energy Authority.

The aid is paid for a fixed term and the aid scheme is applicable in 2017-2021. The level of the aid payable in Finland is half of the maximum allowed by the EU rules. The aid is linked to the price of emission allowances, and it decreases when the price of emission allowances falls. The current estimate for the amount of the aid to be paid in 2018-2021 is about EUR 30 million per year. The amount of aid to be paid this year is EUR 43 million.

Timo Ritonummi, Industrial Counsellor, Ministry of Economic Affairs and Employment +358 29 506 4798
Tarja Virkkunen, Senior Officer, Ministry of Economic Affairs and Employment +358 29 504 8252

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