HELSINKI – Tax cuts and a fund to fight climate change

The Finnish five-party government, criticised for not doing enough to combat climate change, has published a “roadmap” to become the world’s first carbon-neutral welfare society by 2035, saying it would “specify the timetable and objectives for the preparation of climate measures”.

Although concrete measures were missing from the roadmap, the government not only decided “to gradually lower the electricity tax paid by the manufacturing industry to the minimum allowed in the EU, starting in 2021”, but it also decided to set up a fund to ensure the carbon neutrality transition is “fair and just”.

“To boost clean investments, the government has decided to gradually lower the electricity tax paid by the manufacturing industry to the minimum allowed in the EU, starting in 2021. This will support the electrification of industry and create predictability for companies. Predictability is important to ensure that businesses dare to invest in Finland. Climate work can strengthen the competitiveness of the manufacturing industry, open export markers and bring jobs to Finland”, said Minister of Finance Katri Kulmuni.

Instead of using a stick, it seems like the government has handed a carrot to heavy industry.  

Regarding the fund to ensure a “fair and just” transition towards carbon neutrality, the government promised the transfer of “hundreds of millions” from the State Business Development Company (VAKE), which has a capital of €2 billion.

Even if the government was thanked for taking the first positive steps it also received a great deal of flak mainly from environmentalists, particularly as it didn’t mention the peat industry.The inability to deal with the carbon-heavy peat industry can be interpreted as a sign of the friction between the rural Centre Party and the more urban Greens, both of whom sit in the government. (Pekka Vänttinen | EURACTIV.com)

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