Finland | The government is looking for a fast track to the licensing of green investments

“Will large industrial investments end in Finland?”, Kauppalehti asked in April 2022, when the Supreme Administrative Court (KHO) stopped the chemical giant Basfin Harjavalta battery material factory’s environmental permit.

The second permit round went better, but the conditions are so strict that the company still hasn’t started operations until the company has been able to build a crystallization plant on the factory site to treat the factory’s sulfate-rich wastewater.

Behind the KHO’s decision was the EU Court’s Weser decision in 2015, where the court gave a new, stricter interpretation to the water framework directive that entered into force in 2000. According to the decision, the member countries must unequivocally stop the deterioration of their waters and bring the waters to a good state.

The EU court’s Weser interpretation has affected all new industrial construction in Finland that is built along watercourses or where groundwater or a groundwater protection area seems threatened.

Now, efforts are being made to quickly change the interpretation of the water framework directive in Finland. In October, the Parliament began to consider the government’s amendment proposal to the related laws. The new law is supposed to enter into force at the beginning of next year.

The government wants to implement the national flexibilities made possible by the water framework directive in its amendment proposal, so that, for example, projects promoting the green transition would be able to apply for deviations from the environmental goals and the processing would be easier than at present.

However, it would not be completely clear-cut even when the new law comes into force. Permission to deviate from the objectives of the directive could only be granted for certain projects that are very important in terms of the public interest, the social benefits of which could not be achieved by other means.

This would allow deviations from the water framework directive for, for example, mines and the battery material industry, but the process would not be automatic. The Finnish Environment Agency also warns about this in its statement.

According to it, for example, the mere compliance of the project with the EU approval regulation must not automatically lead to a deviation from the environmental goals. In addition, deviations in projects that cause a load on the water body would only be allowed in cases that would lower the classification of the water from excellent status to good status – not in others.

The confusing thing about the whole thing is that the water framework directive has always had provisions on national flexibilities. So why haven’t the elastics been introduced before?

The problem has been that the member states have been allowed to choose the means by which they strive to achieve the goal of the directive. In Finland, the entire water framework directive was initially considered only indicative, which would have no effect on individual permit conditions. The directive with all its claims was not passed into legislation. It went wrong.

Even the new law will not prevent lawsuits if possible investments affect the state of the waters in Finland. The court will continue to have to assess, for example, in many battery chemical and mining projects, which of them is such an important project from the point of view of society that the conditions of the environmental permit can be relaxed on that basis.