🇫🇮 Hundreds of millions of euros in tax credits for hydrogen projects in Finland

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Tax credits for large-scale clean transition investments have been granted to 37 companies. Large-scale investments aimed at climate neutrality are supported by a substantial program implemented by Business Finland, which consists of two parts: grants and tax credits.

The rationale behind the investment support program aimed at a climate-neutral economy is the intensifying competition between countries for investments. The aim of the support is to ensure that key industrial investments are made in Finland.

The objective of the investment support program is to promote and accelerate significant industrial investments that reduce industry’s dependence on fossil fuels and promote, in particular, low-carbon and energy-efficient industrial production processes and the transition to a climate-neutral economy.

– Investments accelerated by tax incentives will have a significant impact on the decarbonization of the country’s energy economy.  The support has a significant impact on companies’ investment decisions related to, for example, the production of renewable energy and fuels and the electrification of industry. Tax credits, which are widely and diversely used internationally, are an excellent tool for accelerating investment in the future as well. We are aware of many investment plans targeting Finland that we could promote with new government support programs. I encourage lobbying in the EU to ensure that we get the most out of the future support frameworks for Finland, says Lassi Noponen, CEO of Business Finland.

Tax credit for 37 clean transition investments

The tax credit for large clean transition investments attracted a lot of interest, with 54 applications received. Tax credits were granted for 37 investments.

“A total of €2 billion in tax credits was granted. Tax credits totaling more than €1.5 billion were granted to 32 projects for renewable energy production and storage. Other tax credit support is targeted at the production or recovery of battery materials. Companies can take advantage of the tax credit once the investment has been made and put into use in accordance with the permit conditions issued by environmental and other authorities, says Project Manager Sini Uuttu from Business Finland.

    Tax credit/renewable energy production

    VolagHy Kuopio SPV, €150 million
    Suomen Lantakaasu Oy, €14.9 million
    SV Kapusta Oy, €63.2 million
    SV Vaaranlammet Oy, €57.2 million
    Norsk e-Fuel Rauma Oy, €150 million
    Neste Oyj, €18.25 million
    NordFuel Oy, €125.9 million
    Arctic Sisu Corporation Oy, €150 million
    Northern Green Fuels Oy, €109.9 million
    P2X Joensuu Oy, €6.25 million
    Blueberry Field H2X Oy, €150 million
    Freija Group Oy, €110.6 million
    V-S biojalostamo Oy, €56.16 million

    Tax credit/renewable energy storage

    Tuovilan Energiahanke Oy, €23.27 million
    Usva Developing Oy, €16.19 million
    Keminmaan Sähkövarasto Oy, €13.4 million
    Vuolijoen Sähkövarasto Ou, €18.38 million
    Kärppiön Sähkövarasto Oy, €13.6 million
    Korsholm Energy Park Oy, €15.8 million
    KSFR Kukonkylän Energy Storage Oy, €10.5 million
    Pyhäjoen Energiavarasto Oy, €13.8 million
    Lapinlahden Energiavarasto Oy, €13.8 million
    Kallion Aurinko Oy, €13.96 million
    Actavia Energy Oy, €17 million
    Novariana Energy Oy, €17 million
    Koppö Energia Oy, €116.5 million
    Neon Storage Finland 3 Oy, €11 million
    Neon Storage Finland IV Oy, €39.9 million
    Kandalos Project 2 Oy, €13.35 million
    Kandalos Project 9 Oy, €13.4 million
    Tornion Energiavarasto Oy, €27.9 million
    Laakson Aurinko Oy, €19.1 million

    Tax credit/production of essential equipment, components, raw materials

    Arctial MidstreamCo Oy, €150 million
    AA Sakatti Mining Oy, €150 million
    Shanshan New Material Finland Oy, €30.9 million
    UP Catalyst Oy, €47 million
    Jervois Finland Oy, €31.8 million

    How the tax credit works

    A company that makes a large investment in Finland aimed at a climate-neutral economy, with eligible investment costs of at least €50 million, is eligible for the tax credit. The right to an investment credit is granted upon application to companies that make investments in Finland that meet the conditions for tax credits for major investments aimed at a climate-neutral economy as defined by law: energy production from renewable sources and energy storage; decarbonization of industrial production processes and energy efficiency measures; or strategic sectors in terms of the transition to a climate-neutral economy.

    A company can take advantage of the tax credit after the investment has been made, the facility is in operation, and the resulting profitable business generates taxable income. The company can deduct the credit from its corporate income tax as early as 2028.