Finland lacks an industrial playbook – A big opportunity threatens to run away

The industrial investments in Finland rely on the fact that there is a lot of electricity available, emission-free and cheap. Electricity has been Finland’s competitive advantage, but the frosty periods with little wind at the beginning of the year made it clear that the price of electricity will rise and a shortage threatens if there is no wind.

Right after, the war crippling oil and gas production in the Middle East reminds us that Finland needs investments in the electrified industry. Dependence on imported fuels should already be reduced due to the security of supply, and here investments in, for example, the production of electric fuels can help Finland – if the planned facilities are realized.

A study commissioned by the Chambers of Commerce tells about the energy needs of industrythat Finland is already in danger of losing its advantage, which wind power and good electricity transmission capacity have brought in attracting investments.

One concern is the situation in the electricity market similar to the beginning of the year. According to the report, the industry considers that flexible and fast-starting electricity production is needed alongside wind power in order to contain peak electricity prices. The concern is familiar, as are concerns about whether there is room for projects in the electricity grid, especially in southern Finland, and how quickly permits are obtained.

A new concern is the sudden changes in regulation that have been made in Finland, for example, in electricity and mining taxation. According to the chamber of commerce report, they are poison for investments. Also in the latest from Business Finland and Amcham Finland in the investment barometer Finland’s rating as an investment destination was partly boosted by the pace of political decision-making. In the survey, 60 percent of the managers of Finnish and foreign companies estimate that Finland’s political risk has increased over the past two years.

Finland lacks an overall picture of what kind of industry is wanted in the country and what this requires not only from the energy system, but also from taxation, licensing and education. We should also think about how investments in industry and the electricity system are so attractive locally as well, so that the plans do not meet the opposition of the neighbors.

Finland already has a parliamentary vision of climate and energy policy, which culminates in the 2035 goal of carbon neutrality. Although carbon sinks are a big question mark for the goal, the common finish line has been a clear message for clean electricity production and the industry that relies on it.

Next, Finland needs a common vision of the future of industry in the country. Then you have to think about what the state can do to create the conditions for this.

A long-term vision is also needed because business subsidies, taxes and education will come up on the table, among other things, when balancing the public finances continues in the next government terms. In the worst case, this means more investment freezes, if it is not clear what Finland wants.