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Statement on the Proposal for the Use of Finland’s REPowerEU Funding

Chemical Industry Finland (CIF) appreciates the opportunity to express its views on the proposal for the use of Finland’s REPowerEU funding as outlined in VN/25455/2023.

The goal of the chemical industry in Finland is to become nature-positive and carbon-neutral by 2045 as part of its voluntary sustainability program, Responsible Care (read more: [link]). Achieving this goal is not an easy task, and various preliminary investigations have identified critical factors that will be required from both the operating environment and the industry itself to achieve this target. Based on these studies, it is clear that Finnish chemical industry companies can minimize their carbon footprint while significantly increasing their positive impact. In other words, they can reduce direct emissions from factories in Finland while enabling significant emission reductions for global customers.

Achieving a nature-positive and carbon-neutral chemical industry will require massive investments, such as electrification and the use of alternative raw materials and fuels that support carbon neutrality. A fair and competitive operating environment and adequate safeguards against carbon leakage will play a significant role in achieving these goals. Additionally, this transition will require various support programs. On a global scale, numerous support programs are available. For example, the United States has created significant incentives for investments in a clean transition. In response to the global situation, the EU has also allowed for more flexible state aid rules. Several key competitor countries, such as Germany, have embraced these looser state aid rules. Finland should attract investments in a clean transition based on its own strengths and strive to support these investments with comprehensive support programs.

Chemical Industry Finland believes that the targets proposed by the Ministry of Finance seem fundamentally in the right direction. Accelerating environmental permitting and research and development, as well as piloting clean energy and material flows, are also crucial for the realization of the chemical industry’s roadmap.

In the view of Chemical Industry Finland, the third target proposed by the Ministry of Finance, “investments in the clean energy transition,” is of great importance and should be executed in the right way. The allocated funds should be available for a sufficiently wide range of industrial clean transition investments. The realization of the chemical industry’s roadmap will require new investments, but existing factories also have significant needs for replacement investments that reduce greenhouse gas emissions and often reduce dependence on foreign fossil fuels/raw materials. Furthermore, replacement investments are typically quicker to implement, resulting in faster greenhouse gas emissions reductions.

Currently, support is available in Finland for new innovative energy investments. However, it is not possible to receive support for more traditional clean transition replacement investments, such as transitioning from fossil fuels/raw materials to climate-friendly alternatives (e.g., domestic biogas). There is a risk that important investments will not proceed without a “burden-sharing” arrangement because the payback periods/risks are too significant for a company to bear alone.

Chemical Industry Finland believes that the funding criteria should be maintained in a way that allows for equitable and comprehensive support for clean transition replacement investments as described above. Due to the reasons mentioned earlier, Chemical Industry Finland suggests increasing the funding allocation for clean transition investment support from €55 million, for example, to €70 million.